Costco Earnings Shift: Profits from Costco, a sizeable membership-only store, are making headlines again. But the data hide an intriguing change in behaviour. Let’s simplify the facts.
Costco Chief Financial Officer Richard Galanti discussed this tendency in a recent call. Despite more people shopping at Costco, they are buying something other than expensive items, notably non-food items. Gas price drops have also hurt Costco sales.
The shop makes less money selling fuel since gas prices have dropped.
Chat about numbers. It’s excellent that more international customers are visiting Costco. They usually pay less at checkout. This is similar to suggesting more guests attended your party but brought fewer gifts than last year.
Costco earned $2.2 billion. Wasn’t that much? It’s even more astounding when you consider their previous year’s revenue. They made $1.87 billion last year. So they improved this year.
Talk about what people bought. Most shoppers bought food. Think about it: family shopping usually involves buying more food than anything else. It’s the same for Costco. Selling lots of food keeps them in business.
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You can join Costco’s club. This is the “Executive Membership,” which costs extra. It provides additional benefits. With 32.3 million users, almost half of all members have it. Costco sales are 73% dominated by these particular customers.
Not everything’s perfect. More consumers buy groceries at Costco, while fewer buy other items online. Most online purchases are large, like furniture, or tiny, like tools. Consumers are spending less on these items.
A catch, though. Internet sales are vital for kitchen equipment.
Thus, more people buy groceries at Costco but less luxury items, primarily online. Even still, excellent products like kitchen tools sell well online.
Most Costco stores are in the U.S. A year ago, candy sales were sweeter. People bought more food previously, but today it’s the same.
Now consider this. People expected Costco’s club would cost more, but they have yet to join. The price was last raised in 2017. Many expected them to return this year, but they have not announced when.
Finally, Costco will open ten new stores, mainly in the U.S. The stock market is also suitable for them.
In summary, more individuals buy food at Costco but less luxury items. Costco is profitable and wants more stores.
Our Reader’s Queries
What to expect from Costco earnings?
The consensus EPS* forecast for the fiscal year ending Aug 2024 has remained steady at 15.58 over the past week, but has decreased by 0.76% from 15.7 to 15.58 over the past month. Out of the 10 analysts who made yearly forecasts, 5 raised their forecast while 5 lowered it.
Will Costco pay a special dividend in 2023?
Costco has declared a special cash dividend of $15 per share on its common stock. The payment will be made on January 12, 2024, to shareholders of record as of December 28, 2023. The total amount of the payment is expected to be around $6.7 billion.
What is the EPS for Costco 2023?
Costco’s earnings per share (EPS) for the twelve months ending November 30, 2023, increased by 10.88% compared to the previous year. The company’s annual EPS for 2023 was $14.16, which is a 7.76% increase from the previous year. In 2022, Costco’s annual EPS was $13.14, showing a significant increase of 16.59% from the previous year. These figures indicate that Costco is experiencing steady growth and is performing well in the market.
How well is Costco performing financially?
Costco Wholesale is outperforming a significant portion of its competitors in the Retail – Defensive industry with its impressive 3-year average revenue growth rate, which is better than 75.35% of 288 companies. Additionally, its 3-year average EBITDA growth rate of 14.3% ranks better than 63.81% of 257 companies in the same industry. These numbers demonstrate Costco Wholesale’s strong financial performance and position in the market.