Please ensure Javascript is enabled for purposes of website accessibility

Why Costco Stock Rose 15% in November

By Demitri Kalogeropoulos - Updated Dec 1, 2017 at 11:58AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Sales growth appears to be speeding up as the holiday shopping season kicks off.

What happened

Costco (COST 1.35%) stock rose 15% last month, according to data provided by S&P Global Market Intelligence, and the rally significantly outpaced the 2.8% gain in the broader market.

^SPX Chart

^SPX data by YCharts.

The boost pushed the warehouse giant back into solidly positive territory for the year, with shares currently sitting just below the 18% increase logged by the S&P 500.

So what

October's bounce coincided with positive news from many of Costco's retailing peers. Wal-Mart announced in mid-November that its comparable-store sales had accelerated to a 2.7% pace from 1.8% in the prior quarter, for example. And Target during the same week revealed improving third-quarter customer traffic trends.

A customer browses the aisles at a warehouse retailer.

Image source: Getty Images.

Costco's own data confirmed strengthening demand in the retailing industry. On Nov. 29, the company reported an 8% comps increase for the prior four weeks, which included the Black Friday holiday weekend. Comps were up a more modest 6% in the prior month.

Now what

Together, these reports suggest that major retailers like Costco, who have a significant physical presence in addition to a robust digital selling infrastructure, could enjoy healthy growth over the holiday season. Investors will get details on how much profit each of those segments is generating when Costco posts its first-quarter results on December 14.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
COST
$485.76 (1.35%) $6.48

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
311%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.