Costco

While business remains strong, the fact that Costco’s stock is trading near a record high leaves very little room for error . Shares of Costco Wholesale Corp. pulled back Tuesday, after Truist analyst Scot Ciccarelli recommended investors stop buying due to concerns that historically rich valuations increase the risk of a selloff. Ciccarelli noted that the membership-based warehouse retailer’s business remains strong, it is gaining market share versus virtually all retail classes and likely has the highest barriers to entry in all of retail. But with the stock’s (COST) recent outperformance, it is trading at a multiple of forward earnings estimates at “a multi-decade high,” he cut his rating to hold from buy until he sees a more attractive re-entry price. Ciccarelli kept his stock price target at $873, which, prior to the downgrade, was the lowest of the 23 analysts surveyed by FactSet who were bullish. The stock fell […]

Costco is raising its membership fee for the first time since 2017. Starting in September, the new cost will be $65 a year for individuals and $130 for executive memberships, up from $60 and $120. Shares of Costco rose 2.8% in after-hours trading.

Costco Wholesale (COST) reported late Wednesday net sales of $19.64 billion for the four weeks ended June 2, up from $18.16 billion a year earlier. Net sales for the first 39 weeks were $186.07 billion, up from $174.07 billion last year, the retailer said.

Costco Wholesale’s revenue growth continued to climb, up 8.1% in May from last year to $19.6 billion. That’s also an increase from April, when the company’s net sales rose 7.1% to $19.8 billion. E-commerce continues to show success, with online same-store sales up 15.3% year-over-year for May. In April, they rose 14.6%. Total company same-store sales rose 6.4% from a year ago. In April, they rose 5.6%. The stock was down 0.04% to $834 in after-hours trading. Shares are up 26.4% so far this year. On May 30, the wholesale retailer reported fiscal third quarter revenue of $57.4 billion, a 9.1% year-over-year rise. The company narrowly missed estimates calling for $58 billion. U.S. same-store sales rose by 6%, in line with expectations. Earnings for the quarter beat expectations, at $3.78 a share versus FactSet’s estimate of $3.70 a share. Costco is one of the only retailers to still report monthly

We lift our target price to $846 from $770, 47x our FY 25 (Aug.) EPS of $18.01 (up from $17.32; FY 24 up to $16.42 from $16.04) vs. 38x five-year mean. COST posted a solid F3Q revenue/EPS beat, with traffic/average ticket up and renewal rates in U.S./Canada now at ~93%. COST saw positive comps in many nonfoods categories, a stark contrast to many other retailers, which we attribute to COST’s higher-income customer base and unmatched merchandising strategy. While we maintain a Hold on valuation concerns, we believe COST’s premium valuation can hold given 1) plenty of club unit growth (~25-30 per year; mostly in U.S., but also journey in China is just starting); 2) untapped opportunities in alternative revenue streams (e.g., retail media); and 3) a looming membership fee increase (likely within the next 12 months). With COST now with a new CEO and CFO, we think more focus will

By Ben Glickman Costco’s profit rose ahead of Wall Street’s expectations in the third quarter as the company’s surging online sales buoyed results. The wholesale retailer reported a profit of $1.68 billion, or $3.78 a share, in the 12 weeks ended May 12, compared with a profit of $1.3 billion, or $2.93 a share, a year earlier. Analysts polled by FactSet expected a per-share profit of $3.70. Revenue rose 9.1%, to $58.52 billion, beating the $58.02 billion expected by analysts polled by FactSet. Same-store sales were up 6.6% for the period, compared with the 6% expected by Wall Street analysts. Canada and other international stores posted a higher jump in comparable sales than U.S. stores. E-commerce comparable sales were up about 21% from a year earlier. Write to Ben Glickman at ben.glickman@wsj.com

By Tomi Kilgore and Claudia Assis Same-store sales increased the most in five quarters, and beat expectations for an 11th straight quarter Costco Wholesale Corp. reported fiscal third-quarter profit, revenue and same-store sales that all beat Wall Street forecasts, but shares of the membership-based warehouse retailer pulled back from a record high. The stock (COST) slipped 0.9% in Thursday’s after-hours session, after closing the regular session up 1.1% at a record $815.34. Net income for the quarter to May 12 rose to $1.68 billion, or $3.78 a share, from $1.30 billion, or $2.93 a share, in the same period a year ago. That beat the FactSet consensus for earnings per share of $3.70. Total revenue grew 9.1% to $58.52 billion, above the FactSet consensus of $58.02 billion, as net sales increased 9.1% to $57.39 billion and membership fees were up 7.6% to $1.12 billion. Comparable sales, or sales from stores

Costco Wholesale (COST) reported fiscal Q3 earnings late Thursday of $3.78 per diluted share, up from $2.93 a year earlier. Analysts polled by Capital IQ expected $3.68. Net sales for the quarter ended May 12 were $57.39 billion, up from $52.60 billion a year earlier. Analysts surveyed by Capital IQ expected $58 billion.

Costco’s customers looking for value are increasingly opting for cheaper private-label branded products. CFO Gary Millerchip says on a call with analysts that when the company cannot reduce prices for customers, it looks to provide Kirkland Signature items with at least 20% value compared to national brand items. Millerchip says the new men’s walking shoe and facial wipes are already doing quite well, and the company has cut prices on Kirkland pine nuts and frozen shrimp skewers. The company’s new Kirkland Signature lemon blueberry loaf and morning buns also sold well.

Costco shoppers at both ends of the income range are beefing up their purchases. CEO Ron Vachris says on a call with analysts that it’s a healthy environment for all types of shoppers given the company’s value at all price levels. In the meat department, lots of volume is driven by ground beef and boneless, skinless chicken breasts, Vachris says. Meanwhile, wagyu and prime beef offerings are also growing.

Costco Wholesale shares are looking very attractive to investors as retail spending remains tight, and that sentiment is probably going to intensify as spending becomes even more volatile heading into election season, UBS analysts say in a research note. “As this takes place, Costco’s share gains will look even more compelling and the stock will sustain its premium valuation,” the analysts say. The market currently has little appetite for market share losers, and Costco is positioned to keep scooping up market share as macroeconomic strains have more consumers seeking out warehouse memberships to maximize their spending power, the analysts say.

Costco Wholesale’s (COST) upcoming fiscal Q3 financial results are expected to emphasize the strength of its warehouse club business model, UBS Securities said in a note. The firm noted that Costco has consistently increased foot traffic by mid-single digits regardless of the macroeconomic backdrop. “With such strong and consistent growth in footsteps, [Costco] offers exactly what the market is looking for right now, given that retail investors have very little appetite to be exposed to market share losers and are increasingly favoring market share winners,” UBS said in its note Monday. UBS said new member growth, increasing traffic and new store openings likely helped the company grow its net sales by 8%, while earnings per share are estimated at $3.75, above the $3.71 consensus, for fiscal Q3, the firm added. Costco is scheduled to release fiscal Q3 results Thursday. “We believe [Costco] can continue to appeal to a cash strapped