Taking a longer term view of the stock, while volatility has picked up over the past year or so, COST has essentially moved in a solid trend higher since early 2009, when the markets began to heal from the financial crisis. In fact, since March 2009, COST has surged by over 300%, despite some rather mediocre growth rates during that span. To put those growth struggles into better context, the company's best growth rate from 2Q13-2Q17 was 9%. In each of the past two quarters, COST has easily surpassed that performance with revenue up 16% in 4Q17 and 13% in 1Q18. Providing a lift last quarter was a bump in per-club member growth of +1.0%. That might not seem like a material change, but, that was its strongest membership growth rate since 1Q17.
Which brings us back to this morning's news. COST's +11.5% comp is its best in at least twelve months. Here's a look at its recent comp growth rates: November: +10.8% ... October: +7.5% ... September: +8.9% ... August: +7.3% ... July: +6.2% ... June: +6.0% ... May: +4.5% ... April: +3.0% ... March: +6.0% ... February: +4.0% ... and January: +7.0%.
As a caveat, this year's numbers benefited from one additional shopping day as compared to last year, leading to a positive impact of 2.5% vs. December 2016's 3.0% figure. Also, foreign currencies relative to the U.S. dollar did help a bit too, adding 150 basis points to the company as a whole. But, outside of those items, it is clear that COST had a very solid December as the average transaction per customers was up 4.6% and as the company saw strength across multiple product lines.
On that note, during its conference call last night, management noted that major hardlines were up mid-teens, led by appliances, tablets, and computers. Meanwhile, food and sundries saw a high-single digit gain, led by fresh foods. with growth across each department (meat, bakery, deli, produce). Lastly, higher gasoline prices also helped, providing a 110 basis point bump.
To conclude, while the impressive December comps do come with a few asterisks attached, the report does express that business is very healthy at COST. And its last two quarter's, which showed a marked pick-up in growth, offer further evidence of this resurgence.