Costco sales are highly correlated with employment levels: manufacturing, services, agriculture, and government. As employment increases, consumers are able to purchase more basic goods, including groceries. All significant indicators are coincidental – which means that Costco sales are impacted by market trends in the same quarter.
Over the last few quarters, Costco’s growth has slowed. This appears to be in line with the brick & mortar retail sector as a whole since on-line sales continue to accelerate. The recent Amazon’s acquisition of Whole Foods seems to have hurt Costco’s share price.
SalesForekast™ projects Costco to perform worse than their best fit line and remain flat over the next several quarters. This can be correlated with the relatively flat projected growth rates of the market indicator that have a high correlation with Costco sales.
Note: SalesForekast™ allows you to change the projected growth rate of macroeconomic indicators. This feature enables the testing of sensitivities and can help determine how they shape company forecasts.