With an over 10% YOY bump, Costco Wholesale (COST, Financial) announced December net sales of $27.52 billion, which came in significantly higher than experts had projected. Supported by a later Thanksgiving and Black Friday, the
figures, cover the five-week period ending January 5, including a 9% increase in U.S. comparable sales and a 34% leap in e-commerce sales.
While lowering their price objective to $1,065 from $1,090, JPMorgan analysts kept an "overweight" rating on Costco shares. Notwithstanding the change, the current target is a 15% premium over Costco's Wednesday closing price of $927.37. With a "neutral" rating and a $1,060 price target, city analysts expect "moderate strength" in the company, which has dropped 7% from December 11, the record high.
JPMorgan said that the performance of the business was driven by strong expenditure by higher-income and upper-middle-class consumers. Costco's strong holiday performance matches its December fiscal first-quarter earnings, which also exceeded estimates. Analysts are optimistic about the retailer's endurance in the fast-evolving customer environment even if sales momentum keeps moving toward 2025.
