Costco Posts Solid Q1 Despite Website Outage

Costco posted solid comparable sales numbers in fiscal November and the first quarter, even if the warehouse club suffered a digital hiccup during the holiday weekend.

The company reported comparable sales for the first quarter ended November 24, excluding fuel and foreign exchange rate effects, up 5%, with comps in the U.S. up 5%; Canada up 5.1%; and other international markets up 4.5%. For the November fiscal period ended December 1, comps gained 4.3% in the U.S.; 5.8% in Canada; and 6.8% in other international markets for a company advance of 4.8% versus the year-previous month.

Digital comps increased 5.7% for the quarter but decreased 3.7% for November when compared with results in the year prior. Costco attributed the negative November number to a 20 percentage point hit due primarily to  Thanksgiving/Black Friday/Cyber Monday occurring a week later this year, resulting in Cyber Monday occurring in the company’s fiscal December.

To a lesser extent, Costco noted, website performance issues experienced by consumers shopping the company’s U.S. and Canadian websites on Thanksgiving Day and Black Friday contributed to the comp slip. Total and comparable sales were trimmed about one and one-half percentage points because of the timing and website issues, Costco added.

Net sales were up 5.6% to $36.24 billion for the quarter and up 6.7% to $13.62 billion for November versus the year before, the company indicated.

In a conference call, Costco reported that Texas, the Bay Area and the Midwest were the U.S. region reporting the strongest sales gains. As for merchandising categories, softlines comps including home furnishings and housewares, advanced in the low to mid single digits. Housewares, special order kiosks and apparel led softline segment sales. Hardlines comps advanced in the low single digits with majors, health and beauty and hardware leading.