Competition is heating up between Costco (NASDAQ:COST) Walmart (NYSE:WMT) and Target (TGT) – That’s Good News For Consumers
By Leslie Cohen
CWEB (@cweb) | Twitter
Cutting prices for these companies can also eat into profit margins. Shares of Costco Wholesale (NASDAQ:COST) are up more than 2% on Thursday, June 7th, 2018.
Costco reported tell showing same Source Dale 11% and net sales were up 11.02 Billion from 9.6 billion from the same month of May, 2017.
Costco’s e-commerce sales were up 34%. Rising gasoline prices along with a weaker dollar added more than 3 percentage points of incremental growth. Concurrently, membership fees increased to 14.4% year over year, advanced by a 9% membership fee increase Costco placed into effect in the U.S. and Canada last June.
Costco competes well with its competitors such as Amazon.com, Inc. NASDAQ: AMZN, and Walmart Inc. NYSE: WMT. Costco has announced it will raise its minimum to a minimum of $14 an hour it employs 130,000 hourly workers. The new wages are set to take place on June 11th which is double the federal minimum wage that is currently at $7.25 per hour. On a pre-tax basis, this will add approximately $110 million to $120 million of incremental costs annually.
Strong earnings for Costco reported have calmed down the fears related to the Amazon Whole Foods takeover. Costco stock should reap healthy gains in the near and long-term since the acquisition of Whole Foods by Amazon. Costco has gone through a string of quarters with comparable sales growth, robust profit growth and healthy margins.
Comparable sales in the U.S. rose by 5.7% at 7.4% elsewhere .5% in Canada Amazon’s acquisition of Whole Foods Costco sales growth Trends have actually improved. “We can see multiple quarters of evidence supporting the trend of growth Costco, but uncertainties related to government fiscal and tax policies including increased tariffs and duties and other restrictions could adversely affect a man products and services,.” as stated in a Securities and Exchange Commission filing.
CWEB Analyst’s have initiated a Buy Rating for Costco (NASDAQ:COST) , and a Price Target of $300
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