Costco’s sales tick back up for April

Costco Wholesale rebounded in April with improved net and comparable sales results, though online sales continued to slide.

For the four weeks ended April 30, net sales totaled $17.85 billion, up 3% from $17.33 billion a year earlier, Costco reported Wednesday after the market close. That topped the warehouse club chain’s performance in March, when net sales edged up just 0.5% year over year, and built on a 13.9% annual gain in April 2022.

Net sales in the 35-week year-to-date period climbed 5.6% to $155.62 billion from $147.33 billion a year ago, Costco said.

Monthly sales results have faced difficult comparisons as Costco continues to cycle robust prior-year increases. Companywide, comparable-club sales grew 1.4% year over year in April and were up 4.3% excluding changes in gas prices and foreign exchange (FX) rates, compared with a comp-sales decrease of 1.1% ( 2.6% excluding fuel and FX) in March and a 12.6% gain (8.7% excluding fuel and FX) in April 2022.

Among Costco’s business units, April comp sales inched up by 0.9% annually in the United States ( 2.9% excluding fuel and FX) and by 0.5% in Canada ( 8.3% excluding fuel and FX) while rising 4.9% internationally ( 7.5% excluding fuel and FX), Costco said.

The retailer’s e-commerce results remained down year over year in April—the sixth consecutive month of declines—but saw a sequential improvement. Overall, online sales fell 5.9% for April (-4.9% adjusted) versus a 12.7% decrease (-11.6% adjusted) in March and a 5.7% increase (6.2% adjusted) in April 2022.

According to Josh Dahmen, assistant vice president of finance and investor relations at Costco, both club traffic and basket size improved in April.

“Our comp traffic, or frequency, for April was up 5.2% worldwide and 4% in the U.S.,” Dahmen said in a phone report. “The average transaction was down about 3.6%, which included the negative impacts from FX and gas deflation,” he added. In March, comp traffic gained 4.6% worldwide and 3.6% in the U.S., while the average transaction decreased 5.8%.

Foreign currencies relative to the U.S. dollar, on a year-over-year basis, negatively impacted Costco’s total and comparable sales by about 1.2%, including 6.7% in Canada and 2.2% internationally, Dahmen reported.

“Gas price deflation negatively impacted total reported comp sales by approximately 1.7%,” he said. “The average worldwide selling price per gallon was down approximately 11% versus last year worldwide.”

U.S. regions generating the top comp-sales performances in April were the Northeast, Midwest and Southeast, while internationally Spain, the United Kingdom and Mexico posted the strongest results, Dahmen said in the call.

Inflation also continued to let up in grocery and health-and-beauty care categories. “Year-over-year inflation for food and sundries and fresh foods was lower than in March,” Dahmen noted.

As in March, grocery comp-sales growth (excluding the impact of FX) led the way among Costco’s core merchandise categories.

“Food and sundries were positive in the high single digits. Sundries, cooler and food were the strongest departments. Fresh foods were up mid-single digits; better-performing departments included bakery and produce,” Dahmen said. “Nonfoods was negative low single digits. Better-performing departments included tires, automotive, and health and beauty. Underperforming departments were home furnishings; majors, primarily consumer electronics; and jewelry. Ancillary business sales were down mid-single digits. Food court, pharmacy and optical were the top performers. Gasoline underperformed, driven by the [decrease in] average price per gallon.”

Issaquah, Washington-based Costco operates 851 warehouse clubs overall, compared with 829 a year ago. By market, the retailer has 585 clubs in the U.S. and Puerto Rico, 107 in Canada, 40 in Mexico, 32 in Japan, 29 in the United Kingdom, 18 in Korea, 14 in Taiwan, 14 in Australia, four in Spain, three in China, two in France, and one each in Iceland, New Zealand and Sweden. Costco also runs e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.