Costco (NASDAQ:COST) has been one of the biggest pandemic retail winners. The warehouse club operator's sales have surged in 2020, even though it didn't invest in curbside pickup or other omnichannel strategies that would've raised costs.

The strong performance continued into November -- or at least the first three weeks of the month. Nevertheless, Costco stock pulled back modestly after the November sales release, offering a buying opportunity for long-term investors who want to own this high-quality retailer.

November at a glance

Costco generated sales of $15.67 billion last month, up 15.1% from $13.62 billion a year earlier. Comparable sales increased 13.4% year over year, with double-digit gains in all of the company's major regions.

The entrance to a Costco warehouse.

Image source: Costco Wholesale.

Excluding the benefit from a weaker dollar and the headwind from lower gas prices, Costco's comp sales growth would have been a bit stronger at 14.6%. That represented a slowdown relative to the company's adjusted comp sales growth of 16.9% in September and 16.5% in October. Costco's November sales performance also fell slightly short of the analyst consensus, contributing to the stock's pullback.

Continuing recent trends, comp sales for food and sundries increased by more than 20% last month. Fresh foods sales grew even faster. Hardlines and softlines -- Costco's other main merchandise categories -- posted growth in the mid-teens. These sales gains offset another double-digit comp sales decline for Costco's ancillary businesses. Lower gasoline demand and a sharp drop in food court sales are driving that weakness.

A tale of two months

One interesting aspect of Costco's November sales performance is that sales growth slowed quite dramatically in the final week of the period (Thanksgiving week), especially in the U.S. This only came to light because of a quirk in Costco's fiscal calendar. The first quarter of its 2021 fiscal year only has 12 weeks and therefore ended a week before the final day of the November fiscal month.

For the 12-week quarter, Costco's adjusted comp sales increased 17.1%. That's higher than the 16.8% comp sales gain it reported for the first nine weeks of the quarter, implying that Costco's comp sales growth accelerated to around 18% for the first three weeks of November. For the full three-month period, though, adjusted comp sales increased 16%. (In the U.S., adjusted comp sales rose 17% for the 12-week fiscal quarter but only 15.7% for the full three months.)

Comp sales growth likely slowed to a mid-single-digit pace during Thanksgiving week to produce such a large discrepancy between the 12-week and 13-week sales figures. Analysts traced this to slower growth in hardlines sales, particularly for big-ticket items like consumer electronics and appliances.

The week of Thanksgiving (and Black Friday) normally brings a discount-fueled surge in sales of such items. However, retailers including Costco have tried to spread promotions throughout the holiday season this year to manage traffic for social distancing. Supply shortages also likely constrained Costco's consumer electronics sales during the holiday week.

Notably, Costco reported that comp traffic increased 5.7% worldwide and 8.4% in the U.S. during November, accelerating from October. This traffic growth and the 20%-plus comp sales gains for food and sundries and fresh foods seem to confirm that lower holiday sales of big-ticket items drove the modest slowdown in sales growth for the month.

Momentum remains intact

Costco's November sales results show that the warehouse club giant is still growing rapidly and gaining market share in key food-related frequency categories. Much of that market share growth will likely stick, as Costco offers lower prices than most retailers and enjoys extremely high customer loyalty. Investors shouldn't be worried about volatility in sales of big-ticket items during Thanksgiving week, particularly given the pandemic-related limitations on traffic and supply chains.

Even after retreating slightly on Thursday and Friday, Costco stock trades at a premium valuation of 38 times forward earnings. However, the company should be able to grow into that valuation over time. For investors with a truly long time horizon, Costco stock still looks like a solid investment opportunity.