Costco Saw Another Strong Month of Sales. Why the Stock Didn’t Leap.

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Costco

‘s sales rose nearly 16% in January from a year earlier, but the news failed to lift the stock even as Wall Street analysts offered positive views on the company.

The company said Wednesday evening that the timing of the Lunar New Year brought forward sales that ordinarily would have come in February. The holiday came on Feb. 1, 11 days earlier than in 2021. “The shift favorably impacted January’s Other International and Total Company sales by approximately 4% and 0.5%, respectively,” Costco said.

Shares of the wholesale retailer were down 0.4% to $518.91.

Same-store sales rose 14.2% in January and e-commerce comparable sales rose 9%, Costco said.

Those results could bode well for the company. Analyst Joseph Feldman at Telsey Advisory Group wrote in a research note Thursday morning that Costco should remain a market-share gainer thanks to its solid sales, high membership renewal rates, and square footage growth. He rates the stock at Outperform with a price target of $610.

The retailer’s digital growth is also something investor should take note of, Feldman wrote. E-commerce sales increased 9.0% –on top of 106.7% growth last year. An expanded product assortment, improved technology, targeted digital marketing, and faster fulfillment should all bolster returns, he said.

Jefferies analyst Stephanie Wissink rates the stock a Buy with a price target of $650, citing the company’s strong November, December and January sales.

“We continue to expect comp trends to moderate as socialization trends take hold in 2022 and at-home spending wanes – but we have yet to see any signal of a reversion,” Wissink wrote in a research report Thursday.

Shares of Costco are up 46% in the past 12 months.

Write to Logan Moore at [email protected].