Costco Wholesale, a leading retail company, announced a decrease in same-store sales for the month of June. However, the decline can be attributed to the drop in gasoline prices rather than a decrease in consumer spending.
In June, same-store sales fell by 1.4%, with the United States experiencing a decline of 2.5%. This follows a 0.3% drop in same-store sales in May. Despite the decline, total sales reached $22.86 billion, which is a 0.4% increase compared to the same period last year. However, this marks a deceleration from May’s year-over-year increase of 1.2%.
The reason behind the decline in same-store sales can be linked to the decrease in gasoline prices. Last year, gas prices reached record highs and significantly boosted Costco’s revenue. However, this trend has now reversed, with the average price per gallon being down 24% in June compared to last year.
Costco estimates that the decline in gasoline prices caused a 4 percentage point reduction in total-store comparable sales. However, when excluding the impact of gasoline prices and foreign exchange rates, same-store sales in June actually increased by 3%. This growth was observed across the United States, Canada, and other international markets.
Interestingly, while the average amount spent per visit decreased by 5.4% in June (partly due to lower gas prices), foot traffic saw an increase across the board. In the United States, comparable store traffic rose by 3.6%.
Even the e-commerce sector witnessed an improvement in same-store sales. In June, e-commerce sales were down by only 0.7% from the previous year, which is a much better performance compared to May’s decline of 7.6%.
Costco’s strongest categories during this period included food, sundries, candy, tires, and health and beauty products.
Following the announcement, Costco stock experienced a slight dip of 0.8% in after-hours trading on Thursday, settling at $533.04. However, overall, the company’s stock has shown a 17% increase since the beginning of this year.