Costco Wholesale Corp. (NASDAQ: COST) reported fiscal 2018 first-quarter results after markets closed on Thursday. The big-box club store posted quarterly diluted earnings per share (EPS) of $1.45 on revenue of $31.12 billion. In the same period a year ago, Costco reported EPS of $1.24 on revenue of $27.47 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.34 and $31.48 billion in revenue.
Net income of $640 million (versus $545 million in the year-ago quarter) was positively affected by a $41 million ($0.09 per diluted share) tax benefit related to a change in accounting rules on stock-based compensation. Last year the company posted a $51 million ($0.07 per share) benefit in the same period.
The company’s profits are driven by membership fees. In the quarter, membership fees accounted for $692 million of Costco’s total revenues, up 9.8% year over year. Costco raised membership fees in June.
Consolidated same-stores sales rose 10.5% year over year in the first quarter, with gains of 10.3% domestically, 11.3% in Canada and 10.1% internationally. Excluding gasoline sales and currency exchange effects, consolidated same-store sales rose 7.9%, with a rise of 8.7% in the United States, 4.3% in Canada and 7.9% internationally.
The company said e-commerce sales rose 43.5% in the quarter, slightly higher than the 42.1% gain in the same quarter a year ago. It is worth noting that even though Costco started from a low base, this stacked growth is impressive.
Operating income rose by $102 million from $849 million to $951 million. Merchandise costs rose by 13.7% to $27.62 billion, and SG&A expenses were up by about 9.7% to $3.22 billion.
Costco noted that there was one fewer sales day in the quarter but that the pre-Thanksgiving and Black Friday sales fell into first-quarter results. The combined effect added about 1.5% to U.S. sales and “slightly less worldwide.”
The company did not publish any guidance, but consensus estimates for the company’s second fiscal quarter call for EPS of $1.40 on revenues of $32.42 billion. For the full 2018 fiscal year, EPS are expected to come in at $6.46 on revenues of $137.52 billion.
Shares closed down about 1% on Thursday at $186.53 and traded up by about 2.7% in the Friday’s premarket session at $191.50. The stock’s 52-week trading range is $150.00 to $191.22. The consensus 12-month price target was $185.81 before results were announced. The high price target is $205.00.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
