Costco Delivers Bulk Joy

People may be jittery about the health of the consumer, but Costco (Nasdaq: COST  ) is going against that grain, judging by its most recent quarterly results.

Fourth-quarter net income at Costco increased 4.7% to $372.4 million, or $0.83 per share, but that includes a non-recurring charge related to how it recognizes revenue from membership fees. Without the charge, Costco would have earned $408.2 million, or $0.91 per share. It's also significant that Costco beat analysts' expectations, which helps explain the stock's euphoric jump today. (At one point today, it was up nearly 10%, and it's hit a new 52-week high.)    

Costco's revenues increased 3% to $20.09 billion. In a particularly bright spot, Costco's same-store sales for the quarter increased 5%, which seems like a significant achievement given recent nervousness about retail comps.

Unfortunately, investors who want to look at the company's balance sheet and free cash flow will have to wait until the company files its regulatory documents; it only supplied its income statement in its press release.

Although everybody's worried about how the consumer will fare over the short term, especially given the increasingly scary housing slowdown, it's arguable that discounters like Costco, Target (NYSE: TGT  ) , and Wal-Mart (NYSE: WMT  ) can lure customers with low prices. Of course, like Target, Costco has the added benefit of attracting a more affluent customer who is more likely to pursue bargains in tough times, yet won't feel the pinch the way lower-income shoppers will. That's a winning attribute for investors.

I've always had a bullish stance on Costco and thought the Motley Fool Stock Advisor pick was a strong stock for the long term. It's well-run, and it's a real winner with consumers. But it doesn't look particularly cheap right now -- it's trading at 30 times trailing earnings, just for starters, and that's quite a premium over its growth rate. Personally, I'd rather wait for some temporary negativity before I buy shares.

Stock up on related Foolishness:

• Costco took the cake in August.
• It cleaned up in July.
• Early this year, Costco was nominated as The Best Retail Stock for 2007.