Costco Earnings Cheat Sheet: Revenue Grows By Double-Digits For Fifth Straight Quarter

S&P 500 (NYSE:SPY) component Costco Wholesale Corporation (NASDAQ:COST) reported its results for the first quarter. Costco Wholesale operates membership warehouses that offer a selection of nationally branded and selected private-label products in categories such as food, appliances, and sporting goods, at low prices.

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Costco Wholesale Earnings Cheat Sheet for the First Quarter

Results: Net income for the discount store rose to $320 million (73 cents per share) vs. $312 million (71 cents per share) in the same quarter a year earlier. This marks a rise of 2.6% from the year earlier quarter.

Revenue: Rose 13% to $21.18 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: COST fell short of the mean analyst estimate of 79 cents per share. Analysts were expecting revenue of $21.25 billion.

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 13.1%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 16.8% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the fourth quarter of the last fiscal year, net income rose 10.6% and in the third quarter of the last fiscal year, the figure rose 5.9%.

Gross margin shrank 2.3 percentage points to 10.6%. The contraction appeared to be driven by increased costs, which rose 13% from the year earlier quarter while revenue rose 10.1%.

The company has now fallen short of estimates in the last two quarters. In the fourth quarter of the last fiscal year, it missed expectations by one cent with net income of $1.08 versus a mean estimate of net income of $1.09 per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 91 cents a share to 90 cents over the last sixty days. For the fiscal year, the average estimate has moved up from $3.82 a share to $3.84 over the last ninety days.

Competitors to Watch: Wal-Mart Stores, Inc. (NYSE:WMT), Target Corporation (NYSE:TGT), Dollar General Corp. (NYSE:DG), BJ’s Wholesale Club, Inc. (NYSE:BJ), Family Dollar Stores, Inc. (NYSE:FDO), Gordmans Stores, Inc. (NASDAQ:GMAN), Dollar Tree, Inc. (NASDAQ:DLTR), Amazon.com, Inc. (NASDAQ:AMZN), eBay (NASDAQ:EBAY), Best Buy (NYSE:BBY), Bed, Bath & Beyond (NASDAQ:BBBY), Apple Inc (NASDAQ:AAPL) and Fred’s, Inc. (NASDAQ:FRED).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

 

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