Fourth Quarter Costco (COST) Profits Beaten, Ecommerce Sales Up Y / Y

Costco Wholesale Company COST released decent results for the fourth quarter of fiscal 2021. While the top line fell short of Zacks’ consensus estimate, the bottom line registered a second straight beat. Impressively, both measures have improved compared to the period of the previous year. This membership warehouse operator has maintained its decent comparable turnover. In addition, the company’s e-commerce sales continued to show strength. Still, supply chain bottlenecks and higher labor and freight costs remain concerns.

Fourth Quarter Results and Sales Table

Costco posted adjusted quarterly earnings of $ 3.90 per share, well above Zacks’ consensus estimate of $ 3.55. On a reported basis, earnings were $ 3.76 per share, including a charge of 14 cents for the write-off of certain information technology assets. The figure increased significantly from the $ 3.13 per share released in the last year’s quarter. This year-over-year increase in bottom line can be attributed to higher income.

Total revenue, which includes net sales and membership fees, was $ 62,675 million, up 17.4% from the prior year quarter. The metric, however, fell short of the Zacks consensus estimate of $ 62,812 million.

Costco Wholesale Corporation BPA Price, Consensus and Surprise

Costco Wholesale Corporation BPA Price, Consensus and Surprise

Costco Wholesale Corporation price-consensus-eps-surprise-chart | Costco Wholesale Corporation quote

Costco’s growth strategies, improved pricing management, decent membership trends and increasing e-commerce penetration contributed to its performance. For the current quarter, the Company’s e-commerce comparable sales increased 11.2% year-over-year. Excluding the effect of gasoline prices and currencies, the same posted an 8.9% improvement year over year.

Without a doubt, Costco Logistics has boosted e-commerce capabilities and made it easier to sell “big and bulky” items. Note that Costco Logistics sales represented 24% of e-commerce sales.

Costco said categories such as jewelry, home furnishings, sporting goods, drugstore, electronics and majors are strong.

With the dominant trend of digital transformation in the industry, retailers are quickly embracing the omnichannel mantra to deliver a seamless shopping experience. Costco, which shares space with Dollar tree DLTR, General dollar DG and Target TGT in the same industry is no exception in this regard. It operates e-commerce sites in the United States, Canada, United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia.

Deepen

Costco’s net sales increased 17.5% year-over-year to $ 61,441 million, while membership fees increased 11.6% to $ 1,234 million for the current quarter. Comparable sales increased 15.5% year over year quarter, reflecting 14.9%, 19.5% and 15% improvement in the United States, Canada and other international locations , respectively. We note that the traffic or frequency of purchases increased by 9.2% worldwide and 8.8% in the United States. The average trades or basket increased 5.8% globally and 5.6% in the United States.

Excluding the impact of foreign currency fluctuations and gasoline prices, the company experienced comparable sales growth of 9.4% for the quarter. The United States, Canada and other international locations recorded same-store sales increase of 10.3%, 6.7% and 7.3%, respectively.

Operating profit for the quarter increased 17.9% year-over-year to $ 2,275 million, while operating margin (as a percentage of total revenue) remained stable at 3.6%.

Store update

Costco currently operates 817 warehouses, including 565 in the United States and Puerto Rico, 105 in Canada, 39 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, three in Spain. , and one in Iceland, France and China.

During fiscal year 2021, the company opened 22 warehouses, including two relocations. Management plans to open at least 25 net new units in fiscal 2022, including second warehouses in China and France, and its first location in New Zealand.

Financial aspects

Costco ended the reported quarter with cash and cash equivalents of $ 11,258 million and long-term debt (excluding current portion) of $ 6,692 million. The company’s equity was $ 17,564 million, excluding non-controlling interests of $ 514 million. Management incurred capital expenditures of $ 1.09 billion during the quarter.

Shares of this company Zacks Rank # 2 (Buy) have gained 31.3% in the past six months compared to the industry’s 16.7% rise. You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

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