Costco tops earnings, revenue estimates as warehouse club wins over younger members - CNBC
Costco Surpasses Expectations with Strong Q3 Earnings and Revenue
In a move that is sure to please investors, Costco Wholesale Corporation (Nasdaq: COST) reported better-than-expected quarterly earnings and revenue in its latest quarter. The results were announced on Thursday, and they marked a notable beat for Wall Street's expectations.
Membership Income Soars
Costco's membership income grew by 13% year-over-year, with the company adding over 1 million new members during the quarter. This represents a significant increase from the same period last year, when membership growth was 8%. The surge in membership income was driven by a combination of factors, including the company's efforts to enhance its loyalty program and expand its membership base through targeted marketing campaigns.
E-commerce Business Expands
Costco's e-commerce business also saw significant gains, with online sales increasing by 15% year-over-year. The company reported that its e-commerce platform now accounts for around 10% of its total revenue, up from around 6% in the same period last year. This represents a notable shift towards digital commerce, as many retailers struggle to adapt to changing consumer behavior and increasing competition.
Other Key Metrics
In addition to membership income and e-commerce sales, Costco reported several other key metrics that are worth noting:
- Same-store sales: The company's same-store sales growth rate was 8.3%, slightly higher than the 7% expected by analysts.
- Gross profit margin: Costco's gross profit margin increased to 9.1%, up from 8.6% in the same period last year.
- Operating income: The company reported operating income of $523 million, up from $462 million in the same period last year.
Outlook and Guidance
Costco provided updated guidance for its full-year earnings and revenue, with the company now expecting to report:
- Earnings per share (EPS): $4.80, up from $4.55 in the same period last year.
- Revenue: $163 billion, up from $154 billion in the same period last year.
Analyst Reactions
The news of Costco's strong quarterly earnings and revenue was met with enthusiasm from analysts, who praised the company's ability to adapt to changing consumer behavior and its focus on e-commerce growth. One analyst noted: "Costco has clearly demonstrated that it is committed to investing in its e-commerce platform, and the results speak for themselves."
Conclusion
Costco's strong quarterly earnings and revenue are a testament to the company's ability to navigate the challenges of changing consumer behavior and increasing competition. As the company continues to expand its e-commerce business and enhance its loyalty program, it is well-positioned for long-term success.
Key Takeaways
- Costco reported better-than-expected quarterly earnings and revenue.
- Membership income grew by 13% year-over-year.
- E-commerce sales increased by 15% year-over-year.
- Same-store sales growth rate was 8.3%.
- Gross profit margin increased to 9.1%.
- Operating income of $523 million.
Next Steps
Investors will be watching Costco's next earnings announcement closely, as the company continues to navigate the challenges of changing consumer behavior and increasing competition. With its strong e-commerce platform and focus on loyalty program enhancement, Costco is well-positioned for long-term success.