Costco (COST) Stock Pops on June Sales Results

  • Membership big-box retailer Costco (COST) delivered very encouraging June sales results.
  • Comparable-store sales increased 13% when excluding gas price and forex changes.
  • COST stock could be an interesting inflation-resistant buy.
COST stock - Costco (COST) Stock Pops on June Sales Results

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An iconic symbol of commerce and suburban America, warehouse retailer Costco (NASDAQ:COST) disclosed encouraging results for its June sales on Thursday afternoon. Overall, sales jumped up 20.4% against the year-ago period, seemingly contradicting the doom-and-gloom projections that the rising inflation rate engendered. In response, COST stock popped up around 1.6% in the early afternoon session.

Costco posted $22.78 billion in net sales for June’s retail month, covering the five weeks ended July 3. In the year-ago timeline, the members-only big-box retailer rang up revenue of $18.92 billion.

Overall, Costco’s comparable-store sales increased 18.1% on a year-over-year basis. This robust tally breaks down to a 21.5% lift in the U.S., a 14.2% rise in Canada and a 4.7% bump up in other international markets. Interestingly, e-commerce — a sector that has witnessed significant deceleration as a percentage of total retail sales since Q2 2020 — increased 7%.

Most notably, when excluding the impact associated with rising gas prices and changes in foreign-currency exchange rates, Costco’s comparable-store sales comes out to a 13% improvement. Plus, the e-commerce lift moves to 8.3%. Naturally, investors bid up COST stock, as the underlying company has effectively become an inflation hedge.

COST Stock and the Practical Mitigation

Given surging costs, various finance-related publications have presented ideas on how everyday individuals can mitigate the impact of inflation.

For instance, InvestorPlace contributor Stavros Georgiadis presented seven stocks that can beat the impact of soaring prices. Many of his ideas feature robust double-digit dividend yields. Still, any market-based approach necessarily involves being in the market, which carries risk to principal.

In contrast, shopping at Costco — with its large packaging and scaled discounts — organically offers one of the easiest and most practical solutions for inflation. It allows for bulk purchases of long-life products that families use on a frequent basis. Should prices rise tomorrow, it’s better to bite the bullet today.

COST stock presents an interesting idea for those investors who are seeking inflation-resistant securities.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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