Did the Results Beat Expectations?
Overall, Wall Street was pleased with Costco’s latest financial results. Analysts polled by Thomson Reuters expected earnings of 93 cents per share, with revenue of $23.6 billion. Although, BMO Capital Markets expected membership fee revenue to total $534 million, which is $23 million higher than the actual amount.
What is the Value to Shareholders?
Shares of Costco jumped about 1 percent after the quarterly numbers, but shares gave up a portion of those gains shortly thereafter. Investors may be booking some profits, as shares have gained about 18 percent year-to-date.
Sanford Bernstein analyst Colin McGranahan explains, “While results were solid and clean in absolute terms, we believe this was largely inline with expectations and unlikely to meaningfully move the stock,” according to Reuters.
As the chart below shows, Costco has experienced a relatively stable rise over the past five years, rising more than 40 percent, which places it among other retailers such as Wal-Mart Stores (NYSE:WMT) and Big Lots (NYSE:BIG). Meanwhile, it has easily outperformed Target (NYSE:TGT) and Sears Holdings (NASDAQ:SHLD).