Costco Wholesale Corporation ($COST) Earnings (Q4 FY22)

 Costco Wholesale Corporation ($COST) Earnings and Opinion:


Costco Wholesale Corporation is a company in the Consumer Defensive sector and operates in the Discount Stores industry. The company engages in the operation of membership warehouse, with locations all over the world. Costco Wholesale Corporation was founded in 1976 and is currently headquartered in Issaquah, Washington. The company made its debut on the stock market in 1986.

Costco Wholesale Corporation Earnings Results:

  • Revenues of $72.09B beating expectations of $71.9B
  • Operating Income of $2.497B missing expectations of $2.588B
  • Adjusted EPS of $4.20 beating expectations of $4.15
  • Comps beat on all metrics except e-commerce
Opinion:
Costco traded lower in Fridays session. The company reported earning after the market closed on Thursday. The earnings report was overall pretty solid, the were able to beat on Revenues and EPS. They lagged a little bit on Operating Income, but it wasn't too far off expectations. Margin on the operating side had a slight miss, but nothing out of the ordinary. There were rumors that Costco had plans to increase membership prices, but there was no evidence of that in this quarter. They gave credit of record renewal rates, which allows them to steady their income and not have to worry about raising prices due to customers not renewing memberships. As far as Comps go, they looked pretty solid, just a little concern with e-commerce. However, with in person shopping returning to pre-pandemic rates, a phase out of e-commerce for warehouse like Costco has been apparent. As far as valuation goes, Costco has a substantially high P/E ratio of 36.73. The P/S ratio is in a good place at 0.95. The PEG ratio sits a little low at 2.67. Debt/Equity ratio is nice at 0.33. In my opinion, Costco is definitely a stronghold kind of stock. They can hold a strong position in your portfolio and generate some solid returns. With the price only 14.73% from its 52 week low, it may be a solid time for buying. The P/E ratio should not be too much of concern, with record renewal rates reported, some signs of growth still seem to be apparent. I am long Costco. 


*Information from Yahoo Finance, Consensus Gurus, finviz

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