Dive Brief:

• Costco on Thursday reported that November net sales rose 13.2% to $11.26 billion from $9.95 billion during the similar period last year. For the twelve-week first quarter of fiscal year 2018 ended Nov. 26, net sales rose 13.3% to $31.13 billion, from $27.47 billion in the same period last year, according to a  company press release. Costco’s core average ticket (excluding fuel price inflation) rose 2.2%, more than October’s 1.6% increase.

• Same-store sales in the month rose 10.8% overall, besting the Retail Metrics consensus estimate for 7% by 380 basis points. Same-store sales in the U.S. increased 10.2% (adjusting for fuel price inflation and currency, the core same-store U.S. sales rise remained impressive at 8.4% growth) and e-commerce same-store sales rose 39%. The performance is the warehouse retailer’s best monthly same-store sales gain in over six years, since its September 2011 12% gain, Retail Metrics noted.

• For the quarter, total company same-store sales rose 10.5%, U.S. same-store sales rose 10.3% (or 8.7% adjusting for fuel price inflation and currency fluctuations) and e-commerce ballooned 43.6%. Costco enjoyed strong growth in most categories, David Sherwood, Costco director of Financial Planning & Investor Relations, said in a pre-recorded call. Hardline same-store sales in the month grew in the low-teens, with mid-teens growth in appliances, tablets and computers and strength in auto, tires, sporting goods and office. Sales of softer goods rose by high single digits, with particular strength in jewelry, apparel and domestics, he said.

Dive Insight:

Costco’s results prompted Retail Metrics President Ken Perkins to headline his note "Holy Costco" and Gordon Haskett analyst Chuck Grom to declare, "Santa comes early to Issaquah," the warehouse retailer’s hometown. "Costco destroyed November," Grom said of the retailer’s sales beats.

Like other retailers, Costco is benefiting from a generally good mood among consumers, displayed by its category strengths, "which suggests a more optimistic shopper given the discretionary nature of such purchases," Grom said in a note emailed to Retail Dive.

The retailer’s e-commerce sales don’t do much to move the needle on its overall revenue, but its growth in the month and the quarter demonstrate that it can be a player; that growth handily surpassed its August-October average increase of 29%, Grom noted.

Costco wasn't open on Thanksgiving, but that didn't affect its results much. While this year’s twelve-week first quarter included one less sales day than the first quarter last year (due to the shift of the Thanksgiving closure this year), pre-Thanksgiving and Black Friday/holiday weekend sales fell into the first quarter this year compared to the second quarter last year, the company said. Combined, these factors produced an estimated net benefit of approximately 1.5% in the U.S., and slightly less worldwide.

That Costco has paid a price on Wall Street for in the aftermath of Amazon’s August acquisition of Whole Foods is not quite fair, Grom suggested. "All told, while the narrative around Costco has taken a hit post Amazon-Whole Foods deal, we remain adamant in our view that the team from Issaquah has one of the best moats in retail – one that will widen once the team begins to data mine their membership database," he said.

Like Amazon, Costco enjoys a sticky membership base, thanks in part to the reality that its shoppers have paid up front via their membership fees. Plus, Costco is widely seen as benefiting from a treasure hunt atmosphere in its stores, where shoppers pick things off the shelves not originally on their shopping list.

Research this month shows that, like Walmart, which has spent loads to boost its e-commerce performance, Costco is up to the price competition that Amazon offers. In fact, Costco consistently beats Amazon on price, sometimes by huge margins, according to research from online student loan refinancing marketplace LendEDU. Items on Amazon on average are 56.48% more expensive than the same products found at a Costco store shopped by LendEDU researchers.

It better be up to that task, considering that a price war may only just be brewing. "This year there's been a marked rise in discussion about an online price war," Keith Anderson, Profitero senior vice president of strategy and insights, said of his firms study in October. "While lower prices are good news for shoppers, suppliers and retailers will inevitably feel the pressure as we head into peak holiday season, as this price war is only set to intensify."