JPMorgan Calls Costco as a “Clear Market leader” as March Sales Exceed Expectations

Takeaways

• Costco announced better-than expected March sales on Wednesday. This included U.S. comparable sale growth that also exceeded Wall Street expectations.
• The retailer has "succeeded in every country it entered,” JPMorgan analysts said.
• Another analyst suggested last week that Costco was relatively well positioned to withstand tariffs.

Costco (COST), which reported sales that exceeded expectations in March, was hailed by JPMorgan analyst as a “clear leader” of the market.

The membership-based retailer posted net sales of $25.51 billion for the five-week period ending April 6, an increase of more than 8% over the previous year. JPMorgan reported that this exceeded the analyst consensus of 6.8% growth in net sales. U.S. comparables sales increased over 7% and also exceeded estimates, while online sales jumped by 16%. Analysts noted a high-single-digit growth in food and sundries, with the cooler, frozen and candy departments leading the way. 

JPMorgan says that the retailer has been experiencing “ongoing global/scaled growth momentum”, which has led to market share gains in multiple regions. Analysts added that “no other major retailer has been successful in every country they entered.” 

JPMorgan Keeps 'Overweight' Rating for Costco

JPMorgan maintained its “overweight” ratings and price target of $1,000, which represents a nearly 11% increase from Costco’s close on Wednesday of $965.19. On Thursday, the shares remained unchanged as the broader market fell amid tariff-fueled volatility.

Analysts at UBS said last week that Costco and its rival Walmart (WMT) may be well-positioned to weather the impact of tariffs. Analysts say that when retailers respond to import tax increases by raising prices, they are least likely for consumers to cut back on necessities like groceries. UBS said that this is good for large retailers such as Costco who can negotiate with vendors to offer customers competitive prices.