Why Costco Stock Popped Today

Shares of Costco Wholesale (NASDAQ: COST) rose on Thursday, following the release of the warehouse retailer's December sales figures.

By the close of trading, Costco's stock price was up more than 3% after rising as much as 5.6% earlier in the day.

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Business is booming

Costco's net sales jumped 8.5% year over year to $29.86 billion for the five weeks ended Jan. 4.

Excluding the impacts from fluctuations in gasoline prices and foreign exchange rates, the retail leader's comparable sales, which measure results at stores open for at least one year, grew 6.3% in the U.S. and 6.2% companywide.

Notably, Costco enjoyed strong gains in its online retail business. The company's digitally enabled sales surged 18.3%.

Cash-strapped consumers are hunting for deals

Costco's tried-and-true strategy of offering quality merchandise at low prices is clearly resonating with shoppers. The discount giant's massive scale enables it to sell a highly curated selection of goods at bargain prices that are difficult for its rivals to match.

These savings help to build loyalty among Costco's members, which, in turn, drives repeat traffic and dependable profits for the retailer.

Store count expansion, together with steadily growing sales at existing locations, should continue to fuel Costco's earnings growth in the years ahead.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.