Costco Wholesale experienced a slight slowdown in its same-store sales growth during the month of October, mostly due to lower growth in the U.S. market.
According to Costco (ticker: COST), same-store sales increased by 3% compared to the same period last year. However, this growth rate is lower than the 4.5% seen in September and the 3.4% gain in August.
Once again, the U.S. market proved to be the weakest for the company, with same-store sales only rising by 1.1%. On the other hand, Canada and other international markets witnessed a significant increase, with same-store sales jumping by 8.5% and 8.2%, respectively. The e-commerce segment of the business also performed well, with a 3.7% increase in same-store sales.
One possible factor contributing to the slower growth is the deflation in gas prices. According to Josh Dahmen, Costco’s assistant vice president of financial planning and investor relations, gas price deflation had a negative impact of one percentage point on the company’s results. The average worldwide price per gallon was down approximately 7% when compared to last year.
Interestingly, Costco has seen a boost in its monthly results in recent months due to higher gas prices. However, the sharp decline in gasoline prices throughout October resulted in lower growth rates. As of Wednesday, the average gallon of gas nationally cost $3.46, compared to $3.82 a month ago.
Dahmen also noted that the worldwide average transaction fell by 1% in October due to gas deflation and fluctuations in foreign exchange rates.
Nevertheless, Costco’s overall net sales still managed to grow by 4.5% year over year, reaching $18.5 billion last month.
In after-hours trading, shares of Costco saw a minimal increase of 0.1%. Overall, the stock has accumulated a solid 22% gain this year.