Costco Beats Estimates, Q4 Earnings Jump 27 Percent

Costco Beats Estimates, Q4 Earnings Jump 27 Percent
By Costco Wholesale (Costco Wholesale) [Public domain], via Wikimedia Commons

Costco Wholesale Corporation (NASDAQ:COST) announced its fourth quarter results on Wednesday. The company’s earnings jumped 27 percent, riding on the increase in membership fees and same-store sales. The Issaquah, Wash.-based warehouse club operator said it earned a net profit of $609 million, or $1.39 per share, compared to $478 million, or $1.08 a share in the same quarter last year.

Costco Beats Estimates, Q4 Earnings Jump 27 Percent

The company said its revenues increased 14 percent to $32.22 billion, beating the Street’s expectations of $31.69 billion. The same store sales increased 6 percent, compared to 12 percent growth in the prior year’s quarter. The results have suffered from foreign currency fluctuations and inflation in gasoline prices.

Alluvial Fund May 2021 Performance Update

Alluvial FundAlluvial Fund performance update for the month ended May 2021. Q1 2021 hedge fund letters, conferences and more Dear Partners and Colleagues, Alluvial Fund, LP returned 5.4% in May, compared to 0.2% for the Russell 2000 and 1.0% for the MSCI World Small+MicroCap . . . SORRY! This content is exclusively for paying members. SIGN UP Read More

Costco Wholesale Corporation (NASDAQ:COST)’s revenues from membership fees jumped a healthy 18 percent, to $694 million. The company had increased the membership fees by 10 percent last November in the U.S. and Canada, the first increase in the past five years. The operating margins surged from 2.7 percent to 2.9 percent, whereas operating income increased 24.5 percent to $949 million.

Costco Wholesale Corporation (NASDAQ:COST)’s revenues have been outperforming the Wall Street expectations in the recent quarters, especially because tumultuous economy has been encouraging shoppers to purchase at the warehouse clubs in bulk, which costs much less than other retail outlets. Costco offers cheaper gasoline than the area pumps, therefore attracting more people at its clubs. Costco is also recording a healthy membership renewal rate.

The company continues to open new clubs in the domestic and international markets. Costco is also diversifying to create a natural hedge against certain risks that may arise in some markets. However, Costco Wholesale Corporation (NASDAQ:COST) is facing tough competition from Sam’s Club, a unit of Wal-Mart, and Target Corporation that follow a similar business model.

Costco is planning to open 14 new warehouses by the end of 2012. Currently it has 608 warehouses worldwide, of which 439 are in the United States alone.

Costco Wholesale Corporation (NASDAQ:COST) stocks gained 3 percent to $102.40 per share after the announcement of the fourth quarter earnings. The company has gained 23 percent this year till date.

No posts to display