Costco shares rise on impressive monthly sales. We still have one big question

CNBC Finance

3 min read

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch â an actionable afternoon update, just in time for the last hour of trading on Wall Street. The S & P 500 is on track for a seventh straight gain as the market's rebound continues on easing tensions in the Middle East. Stocks initially got off to a sluggish start to the day amid uncertainty about the Strait of Hormuz's openness . A sticking point on the Iranian side of negotiations has been Israel's operations in Lebanon. At one point in the day, WTI crude traded at $102 per barrel. But the market reversed, and gains accelerated as oil moved back below $100 after Israel's PM said he had told officials to start ceasefire talks with Lebanon as soon as possible. Costco shares rose slightly after the company reported another impressive set of monthly sales. The wholesale retailer's net sales for the five weeks ended April 5 increased 11.3% year over year to $28.41 billion. On a comparable-sales basis, the company reported 9.4% year-over-year growth, up from 7.4% in February, thanks in part to rising gasoline prices. If you strip out changes in gasoline prices and foreign exchange, comparable sales increased by a very respectable 6.2% year over year. These figures would have looked even better if March hadn't had one fewer shopping day than last year due to the calendar shift of Easter. The company estimated that this timing factor negatively impacted both total and comparable sales by approximately 1.5 percentage points. We have little doubt that Costco's performance is in the upper echelon of retail, but we want to better understand whether higher gasoline prices have driven an influx of new memberships and helped stabilize renewal rates. Another potential catalyst we've seen more analysts write about recently is a special dividend. The company historically pays one out every three to five years. The last special dividend was in late 2023 ($15 per share), so we are approaching the start of the timeframe when another might occur. There are no major earnings after the close on Thursday or before the open on Friday. On the data side, we'll see the March CPI, factory orders, the University of Michigan sentiment survey, and durable goods orders. The CPI report is expected to show a significant year-over-year jump to 3.4% due to rising energy prices. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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Costco shares rise on impressive monthly sales. We still have one big question

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