Costco (COST, Financial) experienced a significant rebound in March, showcasing a 7.5% growth in adjusted comparable sales, a notable improvement from its Q2 performance. This uptick was driven by a 7.2% year-over-year increase in store traffic, an acceleration from February's 6.2% rise. A key factor attracting more customers was the rising cost of gas, with many seeking to benefit from Costco's discounted prices. However, the surge in sales wasn't solely due to cheaper fuel.
Several highlights from March's performance include: - A remarkable 28.0% jump in eCommerce comparable sales, partially attributed to a low comparison from the previous year which saw a decline in sales of big-ticket items such as appliances, consumer electronics, and jewelry. These categories typically represent 50-60% of Costco's total eCommerce sales. - The introduction of a faster, more efficient mobile application home page on Apple (AAPL, Financial) iOS, reducing page load times from eight seconds to under two, and the rollout of Apple Pay for all online members. These enhancements led to a significant increase in app downloads and a resurgence in big-ticket item purchases. - The launch of exclusive online sales of gold bars in October and silver coins in March, both of which have seen robust demand, contributing to the strong eCommerce performance.
Costco's success in March can be attributed to strategic initiatives such as the new mobile app and Apple Pay implementation, along with capitalizing on macroeconomic factors like rising fuel, gold, and silver prices. These efforts not only underscore Costco's adaptability but also its ongoing dominance in the retail sector, as evidenced by its impressive March sales figures.
