Costco closes first-half 2022 with strong June sales

In June, Costco Wholesale made it a streak with double-digit net and comparable sales gains every month through the calendar 2022 first half.

For the five weeks ended July 3, net sales jumped 20.4% to $22.78 billion from $18.92 billion in the prior-year five-week period, when sales were up 16.9%, Costco said yesterday after the market close.

Net sales in the 44-week year-to-date period totaled $188.34 billion, up 16.9% from $161.09 billion during the similar period last year.

Companywide, comparable-club sales rose 18.1% for June and were up 13% excluding changes in fuel prices and foreign exchange (FX) rates, versus year-ago comp-sales growth of 14.1% (7.9% excluding fuel and FX).

By business unit, June comp sales climbed 21.5% in the United States (13.2% excluding fuel and FX), 14.2% in Canada (13.7% excluding fuel and FX) and 4.7% internationally (11.9% excluding fuel and FX), Costco reported.

June’s results built on the growth pace from May, when Costco posted a 15.5% gain (11.8% excluding fuel and FX) in overall comp sales, including 17.5% growth (10.7% excluding fuel and FX) in the U.S.

E-commerce sales advanced 7% on a comparable basis in June and were up 8.3% excluding FX. That compared with a 6.3% uptick in May (7.7% adjusted) and a June 2021 increase of 20.8% (18% adjusted).

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“This year’s five-week June retail month had one additional shopping day in the U.S. versus last year due to the timing of Independence Day. This benefited total company total and comparable sales by approximately 2% and U.S. total and comparable sales by approximately 3%,” David Sherwood, assistant vice president of finance and investor relations at Costco, said in a phone report late Thursday.

FX rates relative to the U.S. dollar negatively impacted net and comparable sales 2.3% for the company overall in June, including 5.3% in Canada and 11% in other international markets, according to Sherwood. Gasoline price inflation lifted total reported comp sales by approximately 7.4%, he said, adding that the average worldwide selling price per gallon was 57% higher in June versus a year earlier.

“Our comp traffic, or frequency, for June was up 10.2% worldwide and 9.0% in the U.S., including the impact from the holiday shift,” Sherwood said. “The average transaction was up 7.2%, which included the benefit from gasoline inflation and the negative impact from FX.”

U.S. regions and markets turning in the strongest comp-sales performances for June were the Midwest, San Diego and Texas, Sherwood reported, while the top international comp-sales results were led by Spain, Australia and the United Kingdom.

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“Overall inflation in June was generally consistent with what we saw in May. Food and sundries [inflation] increased sequentially, while fresh foods inflation was lower versus last month,” Sherwood said.

“Moving to merchandise highlights,” he added, “the following comparable sales results by category for the month exclude the impact of foreign exchange. Food and sundries were positive in the mid-teens. Cooler, sundries and food were the strongest departments. Fresh foods were up by high single digits, and better-performing departments included bakery and deli. Nonfood increased just under 10%; better-performing departments included garden toys, seasonal tires and automotive. Aancillary business sales were up by high 50s. Gas and food court were the top performers.”

Issaquah, Wash.-based Costco currently operates 833 warehouse clubs overall, compared with 810 a year ago. By market, the retailer operates 574 clubs in the U.S. and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland. Costco also runs e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

On June 30, Costco reported that a wholly owned subsidiary completed a $1.05 billion purchase of the 45% minority interest in Costco Taiwan from its long-time joint venture partners. The club retailer now indirectly owns all of Costco Taiwan.