BMO Capital Markets is advising investors to buy Costco shares, raising its rating for the company because of its strong e-commerce growth.
“We believe an acceleration in Costco’s online business is in early stages and could continue to support a strong comp outlook and higher valuation as the company widens its competitive moat,” says the firm in an online CNCB story.
Costco’s online sales rose 42.1 per cent for the first quarter of the 2018 fiscal year compared with the same period last year, and were well ahead of the 21 per cent growth posted in the preceding quarter.
Factors boosting Costco’s online sales performance included the company’s website improvements, the October rollout of the CostcoGrocery delivery service, and the company’s newly enhanced delivery partnership with Instacart.
For the 12-week first quarter of fiscal year 2018 ending November 6, 2017, Costco reported net sales of $31.13 billion, a 13.3 per cent increase from $27.47 billion reported in the 12-week first quarter of fiscal 2017.
Comparable sales increased in Canada, the US and internationally, with Canadian sales increasing 4.3 per cent during the 12-week fiscal 2018 compared to the same period in 2017.
Read the full transcript of the earnings call.
