Earnings Highlights and Review: Costco’s Net Sales Rose 8%; GAAP EPS Jumped 28%

Research Desk Line-up: Burlington Stores Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 16, 2017 / Pro-Trader Daily publishes post-earnings coverage on Costco Wholesale Corp. (NASDAQ: COST) following the Company’s release of its third quarter fiscal 2017 financial results on May 25, 2017. The Warehouse surpassed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Get more of our free earnings reports coverage from other constituents of the Discount, Variety Stores industry. Pro-TD has currently selected Burlington Stores, Inc. (NYSE: BURL) for due-diligence and potential coverage as the Company announced on May 25, 2017, its financial results for Q1 2017 which ended on April 29, 2017. Register for a free membership today, and be among the early birds that get access to our report on Burlington Stores when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on COST; also brushing on BURL. With the links below you can directly download the report of your stock of interest free of charge at:

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Earnings Reviewed

For the twelve weeks ended May 07, 2017, Costco reported that net sales grew 8% to $28.22 billion compared to net sales of $26.15 billion in Q3 FY16. The Company’s total revenue, including membership fee was $28.86 billion, ahead of analysts’ estimates of $28.65 billion.

During Q3FY17, Costco’s reported that on ex-gas and constant currency basis, comparable sales (comps) grew 5%. The Company’s 5% reported comp figure was a combination of an average transaction increased by 2% and an average shopping frequency increased a little over 3%.

For Q3 FY17, Costco’s Merchandise cost was $24.97 billion compared to $23.16 billion in Q3 FY16. The Company’s selling, general, and administrative cost increased to $2.91 billion compared to $2.73 billion in the prior year’s same quarter. Costco’s operating income in Q3 FY17 totaled $968 million compared to $858 million in Q3 FY16. The Company’s depreciation and amortization for the quarter totaled $320 million.

Costco’s net income for Q3 FY17 was $700 million, or $1.59 per diluted share, compared to $545 million, or $1.24 per diluted share, in Q3 FY16. The Company’s net income was positively impacted by an $82 million ($0.19 per diluted share) tax benefit in connection with the $7.00 per share special cash dividend announced on April 25, 2017. The Company’s adjusted earnings of $1.40 per share surpassed Wall Street’s expectations of $1.31 per share.

Membership Details

For Q3 FY17, Costco’s membership fees came in at $644 million, up $26 million, or 4%, compared to $618 million in Q3 FY16. The Company reported strong renewal rates 90.2% in US and Canada, and 87.5% worldwide on a fully capture basis in the reported quarter.

At the end of Q3 FY17, Costco had $37.8 million Gold Start members, up from 37.5 million in Q2 FY17. The Company had 48.6 million members Household compared to $48.3 million in the previous quarter. Costco’s total card holders were 88.9 million at the end of Q3 FY17, up from 88.1 million at the end of Q2 FY17. The Company’s paid Executive Memberships stood at 18.3 million at the end of the reported quarter and increased 345,000 new Executive Membership from the previous quarter. The Company stated that Executive Members now represents about 38% of its member base and about 70% of sales in those countries where it operates.

As of Q3 FY17, Costco had approximately 1.5 million new approve member accounts, which represents about 2 million new cards since June 20th, 2016 and represents around 290,000 additional accounts post Q2 FY17.

Balance Sheet

During Q3 FY17, Costco’s average inventory per warehouse increased $693,000, coming in at $13.4 million compared to $12.70 million in the prior year’s same quarter, and approximately 40% of it was majors electronic. In terms of CapEx, the Company spent $670 million in Q1 FY17, $515 million in Q2 FY17, and $538 in Q3 FY17.

As on May 07, 2017, Costco had cash and cash equivalents of $4.54 billion compared to $3.38 billion as on August 28, 2016. The Company’s long-term debt, excluding current portion was $2.82 billion at the end of the reported quarter compared to $4.06 billion as on August 28, 2016.

Stock Performance

At the closing bell, on Thursday, June 15, 2017, Costco Wholesale’s stock slightly fell 0.89%, ending the trading session at $180.06. A total volume of 1.75 million shares have exchanged hands. The Company’s stock price rallied 12.14% in the last three months, 17.25% in the past six months, and 20.97% in the previous twelve months. Moreover, the stock surged 17.01% since the start of the year. The stock is trading at a PE ratio of 31.23 and has a dividend yield of 1.11%. The stock currently has a market cap of $79.32 billion.

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