Telsey Advisory Group expects Costco (NASDAQ) to post a solid November sales report after the close on Wednesday, November 29, the firm said in a note Monday.
Analysts stated: “We forecast a total comp of 3.8% vs. 4.3% last year. Excluding a projected net gas and FX tailwind of ~70 bps, we estimate a core merchandise comp of 4.5% vs. 5.3% last year, with a US comp, ex gas, of 3.5% vs. 4.6% a year ago, a Canada comp, ex gas and FX, of 10.0% vs. 6.6% last year, and an Other International comp, ex FX, of 4.0% vs. 8.3% in the prior year.”
The firm, which maintained its Outperform rating and 12-month price target of $600 on the stock, noted gas and foreign exchange headwinds but also stated that traffic is expected to be up, while digital sales growth is expected to come in at 10% above last year.
“We expect Food & Sundries and Fresh Foods to outperform, helped by the continued healthy at-home consumption trends,” the analysts said.
“We believe Costco is executing well in this uncertain operating environment. We expect the company to remain a share gainer, with its solid sales and high membership renewal rates (~128MM members),” they added.
In FY24, the firm believes Costco will continue to generate solid EPS growth.
