Latest news with #CostcoWholesale
Yahoo
5 hours ago
- Business
- Yahoo
Costco Stock: Can the Momentum Continue?
Costco Wholesale turned in another strong quarter, as it works to navigate tariff uncertainty. The company's investments in improving the customer experience appear to be paying off. Meanwhile, it continues to benefit from last fall's membership-price hike. 10 stocks we like better than Costco Wholesale › Costco Wholesale (NASDAQ: COST) continues to be one of the biggest winners in retail, turning in yet another strong quarter amid tariff uncertainty. Its stock also has kept its winning ways, up about 13% year to date and 235% over the past five years (as of this writing). Let's dig into the retailer's most recent results to see whether its momentum can continue. Not surprisingly, tariffs were a main topic of discussion when Costco held a call with analysts to discuss its fiscal third-quarter earnings. The company said tariffs pose a significant challenge, but it feels confident in its ability to navigate the current uncertain environment. It's working on ways to mitigate the impact, including sourcing more goods locally and actively rerouting products. It said it also strategically pulled forward seasonal summer items. Costco is also working on improving the customer experience. This includes things like investing in technology to expedite the checkout process, extending gas-station hours, and opening new locations around high-volume warehouse stores to help alleviate congestion. It also recently added a "buy now, pay later" program for big-ticket items, which it says is showing initial promise. These initiatives appear to be paying off, with quarterly revenue rising 8% to $63.21 billion and adjusted earnings per share (EPS) increasing 13% to $4.28. That was ahead of the analyst consensus for EPS of $4.24 on revenue of $63.19 billion, as compiled by LSEG. Same-store sales also rose 8% when adjusting for changes in gasoline prices and foreign currency. U.S. same-store sales jumped 7.9% (adjusted), while Canadian comparable-store sales climbed 7.8% (adjusted). Other international same-store sales increased 8.5% (adjusted). E-commerce revenue increased 15.7% on an adjusted basis. Excluding gasoline and currency effects, the average transaction was up 2.7% worldwide and 2.3% in the U.S. Traffic climbed 5.2% worldwide and 5.5% in the U.S. Meat and produce performed well in the quarter, while gold and jewelry, toys, housewares, and home furnishings were all up by double-digit percentages. Membership-fee revenue climbed 10.4% in the quarter to $1.24 billion, as the company continued to benefit from the fee hike that went into effect in September. Memberships, meanwhile, rose by 6.8% to 79.6 million paid households. Higher-cost executive memberships climbed 9% to 37.6 million; these customers account for only 47% of total paid memberships, but 73% of Costco's worldwide sales. The membership renewal rate was 92.7% in North America and 90.2% worldwide. Both numbers were down slightly due to more digital signups, which have slightly lower renewal rates. The company said that a higher percentage of online signups from younger consumers has led to slightly lower renewal rates. Costco also continues to expand, opening eight new locations in the quarter. It ended the quarter with 905 warehouse stores and expects to open nine more locations this quarter. It said approximately 80% of its openings in fiscal Q4 will be in markets with high levels of traffic and they will cannibalize some existing store sales, but ease congestion. When you compare Costco's same-store sales growth to retail competitors, it's clearly winning and taking market share. Target had an awful quarter in which its comparable-store sales fell 3.8%, but even Walmart's 4.5% growth in U.S. same-store sales couldn't come close to matching Costco's 7.9% rise. Consumers just continue to flock to the value that warehouse stores provide. As Costco continues to outperform, its valuation has continued to expand. The stock now trades at a forward price-to-earnings (P/E) ratio of 57.5. Costco's stock has always had a premium valuation, but that has really ballooned in the past few years: While I think Costco is a great company, I also think it's difficult to justify such a high multiple given its revenue growth (with percentages in the low teens). It's adding new locations, but some of these will cannibalize sales at existing stores. In addition, its new-location growth is less than 3% this fiscal year, showing the maturity of the concept. That said, I also don't know what will stop the stock's momentum. A high valuation has long been a knock on the stock, but it just keeps rising. I personally wouldn't chase it here, but Costco has proved many investors wrong in the past. 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The Motley Fool has a disclosure policy. Costco Stock: Can the Momentum Continue? was originally published by The Motley Fool
Yahoo
20 hours ago
- Business
- Yahoo
AG1 Expands Into Retail With Costco Wholesale (NasdaqGS:COST) Nationwide Partnership
Costco Wholesale recently announced a noteworthy retail partnership with AG1, marking a significant channel expansion into brick-and-mortar stores. This development, alongside the company's strong financial performance, aligns with the broader 1.7% market rise over the past month. Despite a market climbing 11% over the year, Costco's 4.59% increase is likely bolstered by its revenue growth and innovative product launches, such as the DripDrop® Hydration variety pack. These factors collectively contribute positively to the company's momentum and complement the general upward market trend, illustrating a robust overall positioning. Every company has risks, and we've spotted 1 weakness for Costco Wholesale you should know about. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 26 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. The recent retail partnership between Costco and AG1 represents a meaningful channel expansion, potentially enhancing revenue and earnings forecasts. This move into brick-and-mortar stores could elevate sales volumes and support e-commerce initiatives, while further boosting Costco's diversification efforts across its international markets. Over the past five years, Costco's total shareholder return of 262.00% underscores its consistent performance and growth strategies, contrasting the more modest 4.59% increase over the last year compared to a rising market. This longer-term return showcases an impressive trajectory, highlighting Costco's ability to generate significant returns to investors. With the price target set at US$1052.04, slightly above the current share price of US$1010.50, analysts view Costco as being relatively fairly priced, aligning closely with projected earnings growth and market expectations. The slight discount to the price target suggests the potential for alignment between corporate growth initiatives and market sentiment. Relative to the consumer retailing industry, Costco's 1-year return of 4.59% reflects a performance under the market's 11.5% gain; however, its 5-year performance highlights a formidable ability to achieve sustained growth. This context helps investors consider both short-term dynamics and longer-term growth opportunities. Gain insights into Costco Wholesale's past trends and performance with our report on the company's historical track record. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NasdaqGS:COST. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
a day ago
- Business
- Globe and Mail
Costco Counters Tariffs with Strategic Sourcing and Bulk Orders
Membership-only retailer Costco Wholesale (COST) reported its third quarter fiscal 2025 results yesterday, marginally outpacing expectations for both earnings and sales. The company said that consumers are pre-ordering goods and making bulk purchases in anticipation of future tariffs. This has helped the retailer to avoid raising prices and maintain its 'competitive price position.' Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter CEO Ron Vachris noted that, 'We're watching pricing daily, if not hourly, on every key commodity.' Notably, 8% of Costco's goods sold in the U.S. are imported from China, with nearly one-third coming from other countries. Consumers have already stocked up on many summer goods such as patio furniture and sporting equipment, helping Costco to maintain stable prices on them. Here's How Costco Is Mitigating Tariff Impact In the post earnings call, the company noted that it has pulled forward shipments of certain goods to mitigate the potential impact of tariffs this summer. Costco is also re-routing goods sourced from countries facing heavy tariff burdens to its non-U.S. markets. Effectively, it is importing goods into the U.S. from those countries with minimal tariffs. It has also been able to lower prices on essential items like eggs, butter, and olive oil. Costco is also working on shifting production of goods to countries with lower tariffs. Meanwhile, its private-label goods, which offer better value for money, are being preferred over more expensive goods. This, coupled with bulk purchases by customers, has helped Costco deliver solid comparable sales and exceed expectations. Costco has previously stated that raising prices of its products would be a 'last resort,' and the company is living up to that promise, while peers Walmart (WMT) and Target (TGT) are struggling to strategize effectively. Costco saw high-single-digit same-store sales in the fresh food category and double-digit growth in meat. Plus, discretionary items such as jewelry, home furnishings, small electronic goods, and apparel witnessed high-single-digit growth. Overall, Costco is proving its expertise by avoiding price hikes and attracting customers to its wholesale offerings. Is COST Stock a Buy? Analysts remain divided on Costco's long-term stock trajectory due to the uncertainty surrounding tariffs. On TipRanks, COST stock has a Moderate Buy consensus rating based on 17 Buys and seven Hold ratings. Also, the average Costco Wholesale price target of $1,077 implies 6.8% upside potential from current levels. Year-to-date, COST stock has gained 10.2%. Please note that these ratings were given before Costco's Q3 print and are subject to change once analysts revisit their views on the stock. See more COST analyst ratings
Globe and Mail
2 days ago
- Business
- Globe and Mail
COST Earnings: Costco's Financial Results Narrowly Beat Wall Street Targets
Grocery retailer Costco Wholesale (COST) has reported quarterly financial results that narrowly topped Wall Street forecasts. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter The Seattle-based warehouse club reported earnings per share (EPS) of $4.28, which was ahead of the $4.24 expected among analysts. Revenue in the period totaled $63.21 billion, which was slightly ahead of consensus forecasts of $63.19 billion. The company's sales were up 8% from a year earlier. Costco's net income for the three months ended May 11 rose to $1.90 billion, up from $1.68 billion a year earlier. Total comparable sales were up 5.7% on a year-over-year basis. On an annual basis, sales rose 6.6% in Costco's home market of the U.S., gained 2.9% in Canada, and increased 3.2% in other International markets. Costco Wholesale's net income. Source: Main Street Data Membership Fees Costco said its membership fees came in at $1.24 billion, up 11% from $1.12 billion the previous quarter. Costco raised the price of its annual store membership by $5 in September 2024, the company's first membership price increase since 2017. Costco added that it currently operates 905 warehouse clubs worldwide, including 624 in the U.S. The company ended the quarter with $13.84 billion of cash on hand and cash equivalents. COST stock has gained 10% so far this year. Is COST Stock a Buy? The stock of Costco has a consensus Moderate Buy rating among 24 Wall Street analysts. That rating is based on 17 Buy and seven Hold recommendations assigned in the last three months. The average COST price target of $1,077.00 implies 6.58% upside from current levels. These ratings are likely to change after Costco's financial results. Disclaimer & Disclosure Report an Issue
Globe and Mail
2 days ago
- Business
- Globe and Mail
Buy the Spike in Costco Stock After Earnings?
Exceeding expectations for its fiscal third quarter after-market hours on Thursday, Costco Wholesale COST stock has spiked +4% in today's trading session. The bulk food and general merchandise provider has been able to weather market volatility, with COST now up +14% year to date and sitting on gains of over +120% in the last three years. Still, as one of the largest warehouse operators, Costco stock does carry a hefty price tag of over $1,000 a share, making it a worthy topic to decide whether now is a good time to buy. Costco's Q3 Results Attributed to strategic pricing and bulk discounts, Costco saw a steady uptick in membership fee income and comparable sales. Overall, Costo's Q3 sales increased 8% year over year to $63.2 billion, topping estimates of $63.14 billion. Comparable sales increased 6%, with membership fee revenue rising to $1.24 billion from $1.12 billion in the comparative quarter. On the bottom line, Costco posted Q3 EPS of $4.28, edging estimates of $4.25 and rising 13% from $3.78 per share a year ago. E-Commerce & International Expansion Considering Costo's comparable sales growth, the company's expansion is very intriguing, opening 9 warehouses during Q1. This included a relocation site in Melbourne, Australia, and its 37th warehouse in Japan, along with seven new net locations in the U.S. Costco plans to open 10 warehouses during its fiscal fourth quarter, which will include a second warehouse in Sweden, a 20th warehouse in Korea, and its 110th warehouse in Canada. Taking an Amazon AMZN like approach, Costco also stated it had made progress in building out its digital and e-commerce business with a focus on delivering more personal, relevant experiences by helping members save time and money. Costco's e-commerce sales grew by 15% during Q3 thanks to Costco Logistics, a delivery service for bulk shipments and large retail items, which also includes haul-away services. Costco's Outlook on Tariff Uncertainties Acknowledging the impacts of tariffs and broader economic uncertainties, Costco CEO Ron Vachris stated the company remains confident in the ability of its operators and merchants to rise to the challenges and continue to offer great service while finding consistent value for members. Notably, a third of Costco's sales in the U.S. are imported, with items imported from China accounting for roughly 8%. That said, Costco has made steps to pull forward items it needs for the summer while sourcing additional goods produced locally to reduce tariff impacts and ensure inventory levels. Although Costo doesn't typically provide forward-looking guidance, Zacks projections call for total sales to increase 8% in fiscal 2025, with FY26 sales forecasted to increase another 7% to $294.05 billion. Plus, annual earnings are expected to rise 11% this year and are projected to spike another 10% in FY26 to $19.76 per share. Bottom Line Following its favorable Q3 report, Costco stock sports a Zacks Rank #2 (Buy). Correlating with such, FY25 and FY26 EPS estimates are slightly up over the last 60 days, making Costco's attractive growth trajectory more compelling. Furthermore, the positive trend of earnings estimate revisions could continue in the coming weeks and would certainly suggest more upside for COST. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
