Costco Wholesale Corporation (NASDAQ:COST, XETRA:CTO) saw solid sales growth in March, with net sales up 11.3% year-over-year, Jefferies analysts said, citing strong performance across both domestic and international markets.
The note highlighted that traffic rose 1.5% globally and 0.7% in the US, while the number of transactions climbed 7.8% worldwide, including the effects of gasoline pricing, and 4.6% when excluding these factors. Core comparable sales, excluding foreign exchange and fuel, increased 6.2%.
The Southeast, Midwest, and Los Angeles were the top-performing US regions, while Australia, Japan, and Taiwan led internationally.
Digital sales continued to accelerate, with the company’s core digitally enabled segment posting a 23.3% increase in comparable sales, according to Jefferies.
By category, Ancillary items like pharmacy, gasoline, and food courts led growth with mid-20% comparable sales gains, boosted by a 17.8% year-over-year rise in average gasoline prices. Fresh products, led by bakery and meat, increased by mid- to high-single digits, while food and sundries rose low- to mid-single digits, supported by candy and other items.
Non-food categories, including jewelry, major appliances, and hardware, posted mid- to high-single-digit gains.
Jefferies noted that the impact from cannibalization decreased to 40 basis points from 60 basis points previously, reflecting Costco’s ability to expand sales without eroding existing revenue.
Costco shares have gained around 20% year to date.