Costco’s March Sales Top Expectations

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ostco Wholesale Corp. reported March sales. Net sales were $21.61 billion for the five weeks ended April 3, 2022. This was an increase of 18.7% from $18.2 billion last year.

Comparable sales in March in the U.S. increased 19.1%; Canada 17.7% and other international 8.4%. Please note that the comparable sales that excluded the impact from changes in gasoline prices and foreign exchange were: U.S. 12.7%, Canada 12.7% and other international 10.1%. The spread is due to high gasoline sales which increased recently due to the war in the Ukraine..

In order to accelerate gasoline sales Costco’s management has recently issued a new cash reward card for members. It is issued by Citi Bank and Visa. It grants, among other discounts 4% on eligible gas for the first $7,000 per year, and then (in fine print) 1% thereafter. The long lines at Costco gasoline pumps are certainly, in part the result of this new credit card. It allows 3% on all restaurants and eligible travel, 2% on all other purchases from Costco and 1% on all other purchases.

It is expected that in the next fiscal quarters this credit card will again add to the momentum of sales. This year’s five-week March results had one additional shopping day, due to the calendar shift of Easter. Management estimates that this added about one and one-half to two percent to the reported sasles.

E-commerce rose 8.9% in the quarter and 12.5% in the in the 31 weeks.

For the record 39 week comparable sales rose in the U.S. 16.1%, Canada 16.0% and other international 9.1%.

April will have one less selling day.

POSTSCRIPT: A recent report from Naples, Fla. confirmed the long lines at the gasoline pump. I think the excitement will continue since gasoline prices are very high at this time.