Costco Wholesale's (COST) underlying trends remained resilient despite calendar-related headwinds, with August core comparable sales growth remaining broadly within the company's recent range, UBS said in a note emailed Thursday.
UBS said the moderation in August appears attributable to temporary factors, including the Labor Day timing shift, and Canadian weakness.
The brokerage said US traffic remained broadly in line with Costco's trailing 12-month trend, while the company's digitally enabled sales growth accelerated modestly to 17.9% from 17.7% in July.
"We continue to believe COST remains one of the strongest operators in retail, with underlying trends that remain broadly consistent with recent performance," UBS said.
UBS maintained its buy rating and $1,275 price target on the stock.
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