Costco earning forecast to win, membership fees reach .3 billion

Costco earning forecast to win, membership fees reach $1.3 billion

Updated at 5:30 PM EST

Costco Wholesale (cost) Thursday reported better-than-expected fourth-quarter earnings, as membership revenue topped $1.327 billion as new value-focused customers piled in to find relief from the fastest inflation in four decades.

Costco said diluted earnings for the three months ended August 28, the company’s fourth fiscal quarter, rose 11.7% from a year ago to $4.20 per share, about 4 cents ahead of street expectations.

Costco said group net sales rose 15.2% to $70.76 billion, while total revenue rose 15% to $72.091 billion, ahead of analysts’ expectations of $72.07 billion.

Lower gas prices may explain why revenue was modestly ahead of expectations, with pumping costs down more than 20% from a high of $5.10 a gallon in early June to the end of Costco’s fourth quarter, while core inflation eased from 1% in May. . to 0.1% in August.

Costco said same-store sales rose 13.7% globally and 15.8% in the United States, with e-commerce sales up 7.1%. Membership revenue increased 7.5% to $1.327 billion from the previous quarter and $4.224 billion from the year.

However, gross margins shrank about 80 basis points to 10.18%, Costco noted, while overall stocks were up 26% from a year ago, with some modest improvement over “only the past few weeks.”

Costco shares posted a 2.6% drop in after-hours trading after the earnings were released to indicate Friday’s opening bell price of $474.55 per share.

Earlier today, Thursday, Target Corp., the major retail competitor, (TGT) It unveiled plans to hire 100,000 employees to support holiday sales efforts, adding that it plans to offer seasonal discounts early as it continues to monitor inventory levels after an unwanted backlog earlier this year, a plan that contrasts with only 40,000 planned seasonal additions at rival Walmart. (WMT) .

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Deloitte’s holiday retail sales forecast, published earlier this month, suggests total holiday purchases will rise between 4% and 6% from last year to about $1.46 trillion, a marked slowdown from the 15% gain recorded over the same period. in 2021.

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