Costco posts strong Sept sales, boosted by Hurricane Helene, port strike: Analysts

Investing.com -- Costco (NASDAQ:COST ) delivered a strong September sales report, with comparable sales rising 8.9%, a significant increase from August's 7.1%.

According to Citi analysts in a note this week, the sales surge was driven by panic buying ahead of Hurricane Helene and the east coast port strike.

Costco management noted that the events contributed approximately 150 basis points (bps) to the overall sales boost, with the U.S. alone seeing a 200 bps impact.

"COST mgmt believes they will likely give some of the east coast port strike-related buying back in coming months, but mgmt also thinks they picked up additional traffic as consumers were looking to warehouse clubs to stock up," said Citi.

Citi also highlighted that e-commerce sales saw a notable 22.9% increase, reflecting strong consumer demand and product expansion through Costco's Next.com program.

Despite these strong results, Citi maintained a Neutral rating on the stock. "We believe COST is well positioned to navigate the current environment, but trading at ~31x F25 EBITDA, we believe the risk/reward is balanced," wrote the bank.

Meanwhile, Telsey Advisory Group noted that Costco reported total U.S. traffic rose 7.6%, aided by consumers stocking up on bulk items, even though many of the goods were unrelated to the port strike.

Non-food categories performed exceptionally well, according to the firm, with jewelry, gift cards, and home furnishings driving sales up by low teens. Food and sundries rose by high single digits, while fresh foods climbed by low double digits, said Telsey.

"Overall, Costco executed well and gained market share," wrote the firm, maintaining an Outperform rating on the stock.

Source: Investing.com