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Costco's (COST) Q1 Earnings Beat, E-commerce Sales Up 14.3%
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Costco Wholesale Corporation (COST - Free Report) came out with decent first-quarter fiscal 2022 results, wherein both the top and the bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. The quarter marked the third straight earnings beat. This operator of membership warehouses maintained its impressive comparable sales run. Also, the company’s e-commerce sales continued to showcase strength. Yet, supply chain bottlenecks and higher labor and freight costs remain concerns.
Q1 Earnings & Sales Picture
Costco posted adjusted quarterly earnings of $2.97 per share that handily beat the Zacks Consensus Estimate of $2.59. On a reported basis, the quarterly earnings came in at $2.98 per share that included a charge of 20 cents for the write-off of certain information technology assets and a benefit of 21 cents related to stock-based compensation. We note that the company had reported adjusted earnings of $2.29 per share — excluding tax benefits of 33 cents — in the year-ago period. The year-over-year increase in the bottom line can be attributed to higher revenues.
Total revenues, which include net sales and membership fees, came in at $50,363 million, up 16.6% from the prior-year quarter. The metric also topped the Zacks Consensus Estimate of $50,024 million.
Costco’s growth strategies, improved price management, decent membership trends and increasing penetration of the e-commerce business have been contributing to its performance. In the reported quarter, the company’s e-commerce comparable sales rose 14.3% year over year. Excluding the effect of gasoline prices and foreign exchange, the same exhibited an improvement of 13.3% year over year.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco’s net sales grew 16.7% year over year to $49,417 million, while membership fees increased 9.9% to $946 million in the reported quarter. Comparable sales climbed 15% from the prior-year quarter, reflecting an improvement of 14.9%, 17.2% and 13.4% in the United States, Canada, and Other International locations, respectively. We note that traffic or shopping frequency rose 6.8% globally and 5.9% in the United States. Average transaction or ticket was up 7.7% globally and 8.5% in the United States.
Excluding the impact of foreign currency fluctuations and gasoline prices, the company witnessed comparable sales growth of 9.8% in the quarter. The United States, Canada and Other International locations registered a comparable sales increase of 9.9%, 8.3%, and 10.9%, respectively.
Operating income in the quarter increased 18.4% year over year to $1,693 million, while operating margin (as a percentage of total revenues) expanded marginally by 10 basis points to 3.4%.
Store Update
Costco currently operates 828 warehouses — 572 in the United States and Puerto Rico, 105 in Canada, 40 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China and one in Iceland.
During the quarter under discussion, Costco opened nine units, including one relocation. For the remainder of the year, the company plans to open 23 new units, including four relocations.
Financial Aspects
Costco ended the reported quarter with cash and cash equivalents of $12,751 million and long-term debt (excluding the current portion) of $6,667 million. The company’s shareholders’ equity was $18,463 million, excluding non-controlling interests of $537 million. Management incurred capital expenditures of $1.05 billion during the first quarter. The company projected capital expenditures of approximately $4 billion for fiscal 2022.
Shares of this Zacks Rank #3 (Hold) company have gained 37.8% in the past six months compared with the industry’s 17.7% rally.
Boot Barn Holdings, the lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1 (Strong Buy). BOOT delivered a trailing four-quarter earnings surprise of 35.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and earnings per share (EPS) suggests growth of 54.6% and 188%, respectively, from the year-ago period.
Tapestry, which provides luxury accessories and branded lifestyle products, carries a Zacks Rank #1. The company pulled off a trailing four-quarter earnings surprise of 29%, on average.
The Zacks Consensus Estimate for Tapestry’s current financial year sales and EPS suggests growth of 14.8% and 17.9%, respectively, from the year-ago period. TPR has an expected EPS growth rate of 12.3% for three-five years.
Target, a general merchandise retailer, carries a Zacks Rank #2 (Buy). The company pulled off a trailing four-quarter earnings surprise of 19.7%, on average.
The Zacks Consensus Estimate for Target’s current financial year sales and EPS suggests growth of 13.9% and 40.1%, respectively, from the year-ago period. TGT has an expected EPS growth rate of 14.4% for three-five years.
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Costco's (COST) Q1 Earnings Beat, E-commerce Sales Up 14.3%
Costco Wholesale Corporation (COST - Free Report) came out with decent first-quarter fiscal 2022 results, wherein both the top and the bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. The quarter marked the third straight earnings beat. This operator of membership warehouses maintained its impressive comparable sales run. Also, the company’s e-commerce sales continued to showcase strength. Yet, supply chain bottlenecks and higher labor and freight costs remain concerns.
Q1 Earnings & Sales Picture
Costco posted adjusted quarterly earnings of $2.97 per share that handily beat the Zacks Consensus Estimate of $2.59. On a reported basis, the quarterly earnings came in at $2.98 per share that included a charge of 20 cents for the write-off of certain information technology assets and a benefit of 21 cents related to stock-based compensation. We note that the company had reported adjusted earnings of $2.29 per share — excluding tax benefits of 33 cents — in the year-ago period. The year-over-year increase in the bottom line can be attributed to higher revenues.
Total revenues, which include net sales and membership fees, came in at $50,363 million, up 16.6% from the prior-year quarter. The metric also topped the Zacks Consensus Estimate of $50,024 million.
Costco’s growth strategies, improved price management, decent membership trends and increasing penetration of the e-commerce business have been contributing to its performance. In the reported quarter, the company’s e-commerce comparable sales rose 14.3% year over year. Excluding the effect of gasoline prices and foreign exchange, the same exhibited an improvement of 13.3% year over year.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco Wholesale Corporation price-consensus-eps-surprise-chart | Costco Wholesale Corporation Quote
Delving Deeper
Costco’s net sales grew 16.7% year over year to $49,417 million, while membership fees increased 9.9% to $946 million in the reported quarter. Comparable sales climbed 15% from the prior-year quarter, reflecting an improvement of 14.9%, 17.2% and 13.4% in the United States, Canada, and Other International locations, respectively. We note that traffic or shopping frequency rose 6.8% globally and 5.9% in the United States. Average transaction or ticket was up 7.7% globally and 8.5% in the United States.
Excluding the impact of foreign currency fluctuations and gasoline prices, the company witnessed comparable sales growth of 9.8% in the quarter. The United States, Canada and Other International locations registered a comparable sales increase of 9.9%, 8.3%, and 10.9%, respectively.
Operating income in the quarter increased 18.4% year over year to $1,693 million, while operating margin (as a percentage of total revenues) expanded marginally by 10 basis points to 3.4%.
Store Update
Costco currently operates 828 warehouses — 572 in the United States and Puerto Rico, 105 in Canada, 40 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China and one in Iceland.
During the quarter under discussion, Costco opened nine units, including one relocation. For the remainder of the year, the company plans to open 23 new units, including four relocations.
Financial Aspects
Costco ended the reported quarter with cash and cash equivalents of $12,751 million and long-term debt (excluding the current portion) of $6,667 million. The company’s shareholders’ equity was $18,463 million, excluding non-controlling interests of $537 million. Management incurred capital expenditures of $1.05 billion during the first quarter. The company projected capital expenditures of approximately $4 billion for fiscal 2022.
Shares of this Zacks Rank #3 (Hold) company have gained 37.8% in the past six months compared with the industry’s 17.7% rally.
3 Picks You Can’t Miss Out On
Some better-ranked stocks are Boot Barn Holdings (BOOT - Free Report) , Tapestry (TPR - Free Report) and Target (TGT - Free Report) .
Boot Barn Holdings, the lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1 (Strong Buy). BOOT delivered a trailing four-quarter earnings surprise of 35.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and earnings per share (EPS) suggests growth of 54.6% and 188%, respectively, from the year-ago period.
Tapestry, which provides luxury accessories and branded lifestyle products, carries a Zacks Rank #1. The company pulled off a trailing four-quarter earnings surprise of 29%, on average.
The Zacks Consensus Estimate for Tapestry’s current financial year sales and EPS suggests growth of 14.8% and 17.9%, respectively, from the year-ago period. TPR has an expected EPS growth rate of 12.3% for three-five years.
Target, a general merchandise retailer, carries a Zacks Rank #2 (Buy). The company pulled off a trailing four-quarter earnings surprise of 19.7%, on average.
The Zacks Consensus Estimate for Target’s current financial year sales and EPS suggests growth of 13.9% and 40.1%, respectively, from the year-ago period. TGT has an expected EPS growth rate of 14.4% for three-five years.