03:25 PM EDT, 08/08/2024 (MT Newswires) -- Costco Wholesale's ( COST ) traffic growth is helping the big-box retailer shrug off headwinds the majority of its competitors are facing, UBS said in a note emailed Thursday.

Costco late Wednesday reported a 7.1% rise in July sales despite inflationary pressure on consumers, underscoring its strong execution and "unwavering allegiance" to its business model, the firm said.

The company's net sales in the four weeks ended Aug. 4 rose to $19.26 billion from $17.99 billion a year earlier, while net sales in 48 weeks rose to $229.81 billion from $214.53 billion a year earlier.

These results demonstrated the company's continued market share gains, driven by its traffic growth, amid an "increasingly challenging retail backdrop," UBS said.

Meanwhile, the company's competitors "continue to comp significantly below [Costco's] peer-best levels due in part to headwinds related to political events, and other distracting headlines," UBS said.

Costco is also benefiting from product expansions, investments in digital media and mobile app personalization, which could help deepen customer penetration and boost membership as its online offering continues to evolve, according to the note.

UBS has a buy rating on the company's stock with a price target of $940.

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