Is Costco Stock a Buy?
It's been one of only a few champs in the shadow of coronavirus lockdowns. Like rivals Walmart (NYSE: WMT) and Kroger (NYSE: KR), Costco (NASDAQ: COST) was able to give consumers the critical basics they needed. Companywide same-store sales for the quarter ending in early May were up 7.8%, driven higher by the 66% year-over-year improvement in the retailer's e-commerce business.
Expectations of -- and then proof of -- that sales growth boosted the stock in a big way too. Costco shares were initially swept lower in February's rather indiscriminate selling, as the coronavirus contagion first hinted it would creep into the United States. But the stock quickly bounced back to reach record highs earlier this month. Demand for simple consumables isn't abating either, seemingly making this ticker a compelling one to own.
Be careful blindly jumping to such a conclusion, though. While last quarter's top-line growth was remarkable, the quarter in question also exposed a potential flaw for the company. Never even mind the fact that the stock started out the pandemic in its usual richly valued state.
Source Fool.com
