By Sabrina Escobar
Costco Wholesale’s sales jumped nearly 10% in March compared with a year ago, giving the stock a modest lift in Wednesday’s after-hour trading session.
Net sales jumped 9.4% year over year to $23.5 billion, accelerating from February’s 6.9% rise.
Same-store sales — a key metric for retailers that measures sales in stores open for more than a year — rose 7.7% in March. This also marked faster growth from February, which saw same-store sales increase 5%.
The board of directors increased the company’s quarterly dividend by about 14% to $1.16 per share from $1.02 per share. The dividend is payable May 10 to investors holding the shares at the close of business April 26.
Costco stock ticked up 0.7% to $727.50 in after-hours trading. The shares have gained 9.4% this year, modestly outstripping the S&P 500’s 8.2% rise.
An improvement in store visits likely helped boost March’s sales. Comparable traffic was up 7.2% worldwide and 6.9% in the U.S., said David Sherwood, vice president of finance and investor relations.
The company’s efforts to enhance its online business may also be starting to pay off. E-commerce same-store sales once again grew by double-digits, up 28.3% from a year earlier — suggesting consumers are reacting well to Costco’s e-commerce initiatives.
In February, the company rolled out a new home page for its mobile application, as well as the option for members to pay online using Apple Pay. App downloads rose by 2.8 million to a total of about 33 million downloads at the end of Costco’s second quarter, management said on a call with investors in early March.
Costco is one of the few retailers that still provides monthly updates of its same-store sales performance — a practice that many companies discontinued in the early 2000s and 2010s. Since the company doesn’t provide quarterly or yearly guidance, investors tend to rely on the monthly missives to set their expectations for the quarter and year ahead.
Sales of the company’s popular gold bars could be giving e-commerce sales an extra sparkle. During the company’s second-quarter earnings call in March, then-chief financial officer Richard Galanti said e-commerce “showed strength in several areas led by sales of gold and very recently silver.” Costco didn’t mention gold sales in its report Wednesday.
Write to Sabrina Escobar at sabrina.escobar@barrons.com