Costco Wholesale Corp. (NASDAQ: COST) is holding its own after the company earnings report. Costco’s report was for its third quarter, and investors should know that it is considered to be the throwaway or least contributing quarter of the year. Net income rose about 19% due to strong sales and due to membership fee expansion.

Earnings came to $459 million, or $1.04 in earnings per share, while revenues rose by about 8% to $24.08 billion. Thomson Reuters had estimates at $1.03 per share and $24.23 billion in revenue. Membership fees rose to $531 million from $475 million, and this is considered to be the key driver of Costco’s profits. Same-store sales were also up by an above-market 5% in the quarter, although this was up 6% just on a U.S. reporting basis for domestic stores. If you drop out the gasoline sales and the currency effect, Costco same-store sales would have been up by about 7% in the quarter.

Costco stock options were bracing for a move of about $3.00 in either direction, but the stock is up only almost $1.00 to $113.90, and its recent all-time high was $115.77. Costco shares were about 15% higher so far in 2013 ahead of earnings, and its valuation is about 25 times the expected fiscal 2013 earnings estimate.

The report was good. The question is where Costco will find its growth and whether investors will keep paying up for this large valuation ahead. Analysts had a consensus price target of $109.50 before considering the earnings report.

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