Costco (NASDAQ:COST) is having no trouble finding the customers.
The bulk retailer just reported February sales that trounced expectations. Comparable sales growth came in at 6% on the month, while analysts had pegged the boost at just under 5%. Spanning the last six months, sales have risen to $51 billion, as compared to the $47 billion from the comparable period last year.
While Costco has made a habit of beating analysts' expectations, this month was supposed to be different. Thanks to strong headwinds on consumer spending, the deck is stacked against retailers. In February shoppers saw the full effect of the end of the payroll tax holiday at the same time that gas prices took a historic leap. And a delayed start to the income tax return season didn't help, either. These three nasty trends combined to keep many shoppers home last month.
Wal-Mart (NYSE:WMT) executives famously complained about the sales dip in February, asking, "Where are all the customers?" The company reported a 1% rise in comparable store sales last quarter, and said that a delay in income tax returns was getting this quarter off to a bad start. That chilly sales reception was enough to convince Wal-Mart to downgrade its estimate on sales growth to "around flat" this quarter.
Target (NYSE:TGT) had more or less the same gripe, telling analysts in its earnings conference call that February sales results were "softer than expected." The retailer reported an overall 0.4% sales growth in the U.S. last quarter, vs. the 2%-3% it had been expecting.
Not even restaurants could escape the carnage. Darden Restaurants had to warn about its sales growth after customer traffic took a dive in the first few weeks of February. Darden said that its customers were feeling pinched, and they reacted by dialing back their spending.
Costco's customers didn't seem to have the same reaction. And that bodes well for the retailer's quarterly results, due out next week.