BING-JHEN HONG
Channel checks at Costco (NASDAQ:COST) stores by Oppenheimer over the last few quarters have indicated continued improvements in the quality of the retailer’s Treasure Hunt, from stronger brands in apparel/consumer durable offerings to a more powerful assortment of discounted gift cards in store.
In general, Costco’s (COST) Treasure Hunt is a unique shopping experience that offers members access to a rotating selection of exclusive, often high-end items at competitive prices. The section features a curated assortment of products that can include everything from luxury goods, such as diamond rings and gourmet foods, to practical household items and quirky decor.
The stepped-up assortment of brands in apparel/consumer durable categories spotted by Oppenheimer included products from Nike (NKE), Under Armour (UAA), and Adidas (OTCQX:ADDYY) in apparel to Dyson in hair tools, and even Hydro Flask in the insulated beverage category. “In a mixed discretionary backdrop lately, we believe this has contributed to a meaningful improvement in non-foods category trends and the company’s standout performance,” highlighted analyst Rupesh Parikh.
In terms of the gift card promotion, Costco (COST) was observed offering DoorDash (DASH), Instacart (CART), and Uber (UBER) gift cards with a value of $100 selling for $79.99 in select stores (may not be active at your local store).
Oppenheimer expects the Costco (COST) non-food momentum to continue for the balance of the calendar year. Parikh said investors should continue to take advantage of any dips in Costco’s (COST) share price.
A potential catalyst in the year ahead for Costco (COST) could be a stock split. The company fired off its last stock split in January 2000. At the time of that split, Costco’s (COST) stock was trading for a pre-split price of about $100. The stock closed at $892.38 on Friday and swapped hands earlier in the month at $918.93.
