Costco Wholesale (NASDAQ:COST) reported total sales for the retail month of June were up 8% to accelerate from the 6.8% pace seen in May. Comparable sales for the five-week period when adjusted for gasoline prices and foreign exchange increased by 6.2%, led by an 8.2% rise in international markets and a 7.9% increase in Canada, which outpaced the +5.5% mark in the U.S.
Evercore ISI Greg Melich said the +6% core compararable sales mark for Costco (NASDAQ:COST) is tough to talk down on, but also noted that June results are confirming a slower trend into the second half of the year. “While we believe COST is still gaining share, a May and now June air pocket deceleration in sales show glimpses of what could be a slower 2H25 for both Costco and broader retail,” he warned. Melich highlighted that Costco (COST) has now reported two straight months of sub-3% U.S. traffic, which works to confirm some slowdown since the prior trend was above 5%.
Bank of America is more positive on the setup for Costco (COST). The firm expects traffic to improve in July, supported by extended store hours for Executive Members and an additional hour on Saturday (closing time extended from 6pm to 7pm) across the U.S. BofA’s bullish view is predicated on the expectations for warehouse club share gains as consumers continue to adjust to higher prices, making COST’s value proposition even more attractive and more expanding digital opportunities for the retailer.
UBS played it down the middle, saying that while Costco (COST) is seeing some leveling from its overall comparable sales growth as it laps the big gains from gift cards and precious metals, analyst Michael Lasser and his team believe the moderation has been anticipated by the market.
Shares of Costco (COST) edged 0.4% higher in premarket trading to $986.25. The 52-week high for the stock is $1,078.24. Costco (COST) has outperformed Walmart (WMT) and broad retail (XRT) on a year-to-date basis.