In this file:
· Costco quarterly sales miss estimates amid fierce competition
· Costco Reports 4th Quarter Sales, Optimistic For The Coming Year
· Costco Stock Is Down After Earnings. Analysts Are Still Upbeat.
Costco quarterly sales miss estimates amid fierce competition
o Costco Wholesale reported quarterly revenue below Wall Street estimates.
o The U.S. hypermarket chain struggled to attract shoppers in the competitive grocery space.
o Costco and other U.S. grocers are slashing prices while investing heavily in stores and online operations to defend their share of the market as Amazon.com Inc and Walmart expand aggressively.
via CNBC - Oct 4, 2019
Costco Wholesale reported quarterly revenue below Wall Street estimates on Thursday, as the U.S. hypermarket chain struggled to attract shoppers in the competitive grocery space.
Costco and other U.S. grocers are slashing prices while investing heavily in stores and online operations to defend their share of the market as Amazon.com and Walmart expand aggressively.
The membership-only retailer is expanding internationally, opening its first warehouse in China about two months ago, where overcrowding and traffic jams in the neighborhood forced the retailer to limit the number of shoppers in the store.
Costco had record membership sign-ups in Shanghai, partly helped by its social media presence, with over 20,000 registered members, Chief Financial Officer Richard Galanti told analysts on a post-earnings call.
The company said it plans to open its second Shanghai store in 2021.
Costco’s entry into China came amid trade tensions between Beijing and Washington that have burdened U.S. companies with additional tariffs on Chinese imports ranging from footwear, whiskies to televisions.
“We are working with suppliers daily. We’ve gone to pretty much every supplier on every item to see what we can do to both reduce cost and figure out how to do that. In some cases, we’ve reduced our commitments on certain items,” Galanti said...
Costco Reports 4th Quarter Sales, Optimistic For The Coming Year
Walter Loeb, Contributor, Forbes
Oct 4, 2019
Costco reported fourth quarter 2019 sales of $46.5 billion, an increase of 7.0% from $43.4 billion in the previous year. Net sales for the full year were $149.4 billion, an increase of 7.0% from $138.4 billion in 2017. Net earnings were $1,097 million or $2.47 per fully diluted share compared to $1,043 million or $2.36 per fully diluted share. That means that for the full year the company earned $3.66 billion or $8.26 per share compared to $3.13 billion or $7.09 per diluted share, which is a 16.5% increase.
The company opened 12 stores in the fourth quarter. Twelve were in the United States, 1 in the United Kingdom and 1 in China. The Chinese warehouse is near Singapore and had to be closed for safety after being open for only 4 hours. Throngs had to be managed. Over 200,000 families have signed up for membership in this first Chinese store. A second store is planned for Singapore for 2020, as the company slowly gets to know its new customers. The company now operates 783 warehouses, including 544 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 11 in Australia, two in Spain, one in France, one in Iceland and one in China (Singapore). In addition, the company has 18 Business Centers in the United States and one in Canada.
Adjusted e-commerce sales increased 21.9% in the fourth quarter and 23.35% for the full year. Costco is concentrating on one-day fresh grocery delivery and two days for dry grocery delivery. Speed is important for Costco customers. I have bought some office staples that arrived within 24 hours. That is important for the future.
Management indicated during a conference call...
Costco Stock Is Down After Earnings. Analysts Are Still Upbeat.
By Teresa Rivas, Barron's
Oct. 4, 2019
Costco Wholesale stock edged down on Friday, after the retailer’s fiscal fourth-quarter report, even though analysts were largely unfazed by the news.
The back story. Costco (ticker: COST) has climbed more than 40% in 2019, well ahead of the S&P 500’s 16% gain. The company has won praise for a string of good sales reports, its overseas expansion plans, competitive positioning in the grocery space, and strong management. (Barron’s named Costco’s CEO one of the world’s best this spring). Valuation remains a concern, although it doesn’t bother bulls who point to Costco’s continued success.
What’s new. Late Thursday, Costco reported fourth-quarter results, saying it earned $2.69 a share on revenue of $47.5 billion in its fourth quarter, while analysts were looking for EPS of $2.55 and revenue of $47.7 billion. (The company’s bottom line excluded a 22 cents per-share tax assessment.) Comparable sales rose 5.1% in the quarter: U.S. same-store sales climbed 6.1%, while online sales were up 19.8%.