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Why Costco Stock Rose in March

By Demitri Kalogeropoulos – Updated Apr 2, 2020 at 7:59AM

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The warehouse retailer improved on its already industry-leading sales volumes during a sharp demand spike for groceries and cleaning supplies.

What happened

Shares of Costco (COST -4.26%) outperformed a weak market last month by gaining 1% versus a 12.5% drop in the S&P 500, according to data provided by S&P Global Market Intelligence.

The uptick made the warehouse retailer a standout winner through the recent bear market slump, with shares down just 2% so far in 2020 compared with a 24% drop in wider indexes.

A cart moves down the grocery aisle.

Image source: Getty Images.

So what

Costco joined national consumer staples retailing peers Walmart and Kroger in outperforming last month thanks to historically strong sales volumes. Consumers are adjusting to temporary bar and restaurant closures and to new work patterns that involve much more time at home.

The uncertain duration of the COVID-19 pandemic, meanwhile, has many shoppers focused on stocking up on a wide range of products. The bulk-retailing giant is ideally suited to meet that need.

Now what

Costco will post its March sales results on Wednesday, April 8. That announcement will likely include some head-turning revenue numbers. Kroger, for example, recently said its revenue spiked 30% in March after having inched higher by about 2% in prior months.

Those growth rates will inevitably taper off, but Costco still benefits from being a prime destination for members seeking to stock up on essential food and supplies.

Demitrios Kalogeropoulos owns shares of Costco Wholesale. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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