Costco Wholesale Corporation's
What Happened: According to the president and CEO of the company Ron Vachris, "Costco Logistics completed nearly 1 million deliveries in Q1 and over 196,000 deliveries last week alone." He said that Costco continued to gain market share within the e-commerce space, during the analyst earnings call held on Thursday.
Secondly, Costco's U.S. bakery division, "Reached new records of 4.2 million pies being sold the three days prior to Thanksgiving," said Vachris.
Talking about the pharmacy business Vachris added, "Our U.S. pharmacy business has prescription growth exceeding 19% for the first quarter, setting new volume records for that business." And lastly, on Halloween Day, Costco, in its food courts, "set a new record of 274,000 whole pizzas being sold."
"All of these milestones reflect the continued strength of our business across the membership offering," said Vachris.
Why It Matters: Costco reported first-quarter revenue of $62.15 billion, beating the consensus estimate of $62.08 billion. The membership-based retailer reported first-quarter adjusted earnings of $3.82 per share, beating analyst estimates of $3.79 per share, according to Benzinga Pro.
Costco noted its earnings results included a tax benefit of $100 million or 22 cents per diluted share, related to stock-based compensation. Membership fees came in at $1.17 billion, up from $1.08 billion in the prior year's quarter. Earlier this year, Costco announced it was raising the price of its annual store membership by $5. The membership fee increase went into effect on Sept. 1.
Net sales for the first quarter were up 7.5% year-over-year. Comparable sales in the first quarter were up 5.2% in the U.S., up 5.8% in Canada and up 4.7% in the Other International segment. Total comps climbed by 5.2%, and total e-commerce sales increased by 13%.
Price Action: The stock rose 0.29% to $991.30 apiece in premarket trade on Friday. On a year-to-date basis, the stock has risen 51.91%, outperforming the Nasdaq 100 index, which rose by 30.65% in the same period.
What Are Analysts Saying: According to Benzinga, Costco has a consensus price target of $954.38 based on the ratings of 26 analysts. The highest price target out of all the analysts tracked by Benzinga is $1145 issued by Jefferies as of Dec. 5, 2024. The lowest target price is $700 issued by Barclays on March 11, 2024.
The average price target of $1073.33 between Telsey Advisory Group, Oppenheimer, and Jefferies implies a 10.10% side for Costco.
