Costco keeps up sales pace in January
Strong grocery comparable results led by fresh foods
February 3, 2022
![Costco_Wholesale_banner_closeup_view_1.png Costco_Wholesale_banner_closeup_view_1.png](https://eu-images.contentstack.com/v3/assets/blt58a1f8f560a1ab0e/bltc8e9e0e740bef46d/6699813738fb1afc453c22e4/Costco_Wholesale_banner_closeup_view_1.png?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
Costco Wholesale started the calendar year with a bang, posting strong January net and comparable sales atop double-digit sequential and prior-year gains.
In the four weeks ended Jan. 30, net sales advanced 15.5% to $15.76 billion from $13.64 billion a year earlier, when sales rose 17.9%, Costco said yesterday after the market close. The Issaquah, Wash.-based warehouse club chain noted that Lunar New Year/Chinese New Year occurred 11 days earlier in 2022, on Feb. 1, which lifted international sales by 4% and overall sales by 0.5% for January.
Companywide, comparable-club sales rose 14.2% in January and were up 10.8% excluding changes in fuel prices and foreign exchange (FX) rates, following up year-ago comp-sales growth of 15.9% (15.7% excluding fuel and FX).
By business unit, January comp sales climbed 14.1% in the United States (9.5% excluding fuel and FX), 17.8% in Canada (13.9% excluding fuel and FX) and 11.8% internationally (14.6% excluding fuel and FX), Costco reported.
Costco's U.S. club traffic rose 7.5% year over year for January, following an 8.5% gain the previous month.
January’s performance largely upheld the growth pace from December, when Costco recorded increases of 16.2% in net sales and 14.5% in comp sales, the latter including 15.9% growth in the U.S.
E-commerce sales grew 9% on a comparable basis for January and were up by the same percentage excluding FX. That compared with a 17.8% gain in December (the same percentage excluding FX) and a January 2021 surge of 106.7% (105.4% excluding FX).
“Our comp traffic, or frequency, for January was up 9.4% worldwide and 7.5% in the U.S.,” Josh Dahmen, director of finance and investor relations at Costco, said in a phone report late Wednesday. “Worldwide, the average transaction for January was up 4.5%, which included the benefit from gasoline inflation and the negative impact from FX in terms of regional and merchandising categories,” he added.
FX fluctuations, relative to the U.S. dollar, squeezed Costco’s January net and comparable sales by 0.6% overall and 4.9% internationally but lifted Canada’s sales by about 1%.
“Gasoline inflation positively impacted total reported comp sales by approximately 4%. The average worldwide selling price per gallon was 42% higher this year,” Dahmen said.
U.S. regions and markets posting in the best January comp-sales results were Los Angeles, Texas and the Southeast, according to Dahmen. The international comp-sales performance was led by Taiwan, Korea and Australia.
“Moving to merchandise highlights,” Dahmen said, “foods and sundries were positive high single digits [in comparable sales]. Sundries, frozen food and candy were the strongest departments. Fresh foods were up low double digits; better-performing departments included service deli and bakery. Nonfoods were positive high single digits, and better-performing departments included tire shop, health and beauty aids, lawn and garden, and apparel. Ancillary business sales were up mid-40s. Gas, food court and pharmacy were the top performers.”
For the first 22 weeks of Costco’s 2022 fiscal year, covering the period ended Jan. 30, net sales climbed 16.4% to $92.10 billion from $79.11 billion in the year-ago span.
“We are increasing Q2 and full-year estimates due to the strength in November-December-January sales trends, but keep margins the same as previously due to uncertainty regarding inflation and supply chain costs,” Jefferies analyst Stephanie Wissink said late Wednesday in a research note on Costco’s January results.
“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. “The rise in the Omicron variant could have catered to extended food-at-home in January results, but benefits to other categories appear fundamental and durable.”
Costco operates 828 warehouse clubs overall, compared with 803 a year ago. By market, the retailer operates 572 clubs in the U.S. and Puerto Rico, 105 in Canada, 40 in Mexico, 30 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.
Read more about:
Costco