Earnings Cheat Sheet: Costco Revenue Rises 11%, Tops Analysts’ Estimates

Costco Wholesale Corporation (COST) is the retail operator of 582 warehouses, including 425 in the United States and Puerto Rico, 80 in Canada, 22 in the United Kingdom, seven in Korea, six in Taiwan, nine in Japan, one in Australia and 32 in Mexico.

Earnings: Increased by 17% to $.71 per share, or $312 million, compared to $.60 per share, or $266 million, in the same period a year ago.

Revenue: Increased 11% to $19.24 billion, compared to $17.3 billion in the prior year.

Actual versus Wall Street Expectations: Earnings of $.71 cents per share beat expectations by $.02 cents.  The consensus analyst earnings expectation was $.69 cents per share. Revenues easily surpassed the expected $18.81 billion revenue estimate (Thomson Reuters).

Notable Stats: Sales at all Costco clubs open at least a year climbed 7%.

Sales at international Costco clubs open at least a year climbed 14%.

The trailing P/E ratio for Costco is 18.44 and the forward P/E ratio is 18.44.

The company has increased its cash position to $5.3 billion.

The state of California makes up 26% of Costco’s annual sales.

Did You Hear That? Research analyst Brian Sozzi said, “”By all accounts, Black Friday and the weekend were strong for Costco as consumers bought doorbusters … and again, stocked the pantry for holiday festivities.”

Commentary: Shares of Costco have been rising with the broader market since September. Since the end of August, shares are up over $15. The current share price, as shown below, is above both the 50-day and 200-day moving averages. Shares tested support in October and rose higher since. With an impressive double-digit rise in revenues for the retailer, shares should expect to cool off a bit given the recent rise. Meanwhile, the underlying strength in Costco’s fundamentals is very stable. Costco also pays an annual dividend of 1.2%.

Disclosure: No position in COST.

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