Costco (COST) disclosed increased earnings in the first quarter of its fiscal year 2024.
In comparison to the $3.41 adjusted earnings per share anticipated by Wall Street, Costco disclosed a figure of $3.58 for the quarter. Bloomberg data indicates that revenue was $57.8 billion, a 6% year-over-year increase, compared to expectations of $57.71 billion.
Excepting petroleum and foreign exchange, same-store sales were below expectations, a decline exacerbated by the company’s performance in the United States. Quarterly same-store sales increased by 3.8%, falling short of the anticipated 4.3% increase.
The same-store sales growth in the United States was 2.0%, which was lower than the anticipated 2.77%. In terms of same-store sales growth, Canada surpassed expectations by 6.4%. Similarly, international stores disclosed a more substantial increase of 11.2%.
CFO Richard Galanti remarked that the team is “ecstatically surprised” by the level of foot traffic, capitalizing on the momentum it acquired during the pandemic.
“The two years of COVID, we benefited in many ways from more members and more volumes and we’ve not only kept it, we’re continuing now to add to those levels, so we feel very fortunate in that regard,” he stated during an investor conference call.
Additionally, he stated that consumers have started to recommence purchasing non-essential items once more, following a challenging year marked by elevated interest rates and the reapplication of student loan obligations.
The wholesale behemoth declared a special cash dividend amounting to $6.7 billion, or $15 per share. The payment was made in full. The fifth special dividend from the company in the past eleven years will be distributed on January 12.
Annually, Costco’s stock has risen 39%, significantly outperforming the S&P 500’s (GSPC) 23% increase. On Friday, its stock was up approximately 1% in premarket trading.
According to Yahoo Finance Live, Cowen analyst Oliver Chen stated that Costco is among its top choices, praising its private label Kirkland as “pretty legendary.”
Rupesh Parikh, an analyst at Oppenheimer, downgraded the retailer from its top choice status “on account of valuation subsequent to substantial underperformance observed recently.”
