Costco’s Stock Inches Higher Following Its Q4 Earnings Print


Shares of Costco (NASDAQ: COST) inched higher by more than 1 percent Thursday afternoon after the company reported its fourth quarter earnings results.

Costco said that it earned $1.77 per share in its fourth fiscal quarter on revenue of $35.73 billion. The reported metrics were mixed as Wall Street analysts were expecting the company to earn $1.73 per share but on revenue of $36.8 billion.

Net income for the quarter rose to $779 million from $767 million in the same quarter a year ago as comparable sales for the company were flat despite a two percent increase in total sales.

However, excluding the negative impacts of gasoline price deflation and foreign exchange, total comparable sales for the entire company rose 3 percent, with Canada being its best performing geography at 5 percent. U.S. comparable sales rose two percent and international countries (excluding Canada) rose one percent.

The wholesaler ended the quarter with a total of 715 warehouses, 501 of which are located inside the U.S. and Puerto Rico. Looking forward, the company said it will open an additional nine new warehouses (including relocating one) before the end of the year.

Since Costco reported its fiscal fourth quarter results, the company also included its full year financial metrics.

Total revenue for the full 52-week period ending August 28, 2016 rose to $118.719 billion from $116.199 billion in the 52-week period ending August 30, 2015. Breaking down the sales numbers even further shows that membership revenue rose to $2.646 billion from $2.533 billion and net sales rose to $116.073 billion from $113.666 billion.

Despite the increase in sales on a year-over-year basis, net income for the full fiscal year dipped slightly to $2.35 billion from $2.377 billion. The year-over-year decline could be attributed to merchandise costs, selling, general and administrative costs and preopening expenses, all of which rose from a year ago.

Costco’s stock hasn’t been performing that well as of late. Since the start of 2016 it has lost more than 8 percent (not including Thursday’s after-hours gain) and is higher by barely one percent over the past year. By comparison, the retail Exchange Traded Fund (ETF), SPDR S&P Retail (NYSE: XRT) is nearly flat since the start of the year and down a bit more than 5 percent over the past year.