Stocks were flat on Friday, with both the Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC 0.98%) indexes rising by less than 0.1%.
Today's stock market
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow |
0.01% |
2.74 |
|
S&P 500 |
0.05% |
1.20 |
Data source: Yahoo! Finance.
Financial stocks outpaced the broader market, which helped the popular Financial Select Sector SPDR ETF (XLF 1.07%) rise by nearly 0.5%. The Direxion Daily Gold Miners Bull 3X ETF (NUGT 6.77%) enjoyed a solid 3% uptick, too, following yesterday's sharp decline.
Image source: Getty Images.
As for individual stocks, Costco Wholesale (COST 0.20%) and Big Lots (BIG -2.99%) were some of the biggest individual movers as investors reacted to details from their latest quarterly earnings reports.
Costco raises membership fees
Costco shares fell 4% in heavy trading after the warehouse retailer posted holiday-quarter earnings results that showed worse-than-expected revenue and profit figures. Comparable-store sales grew by just 3% for the period. Costco's profits moved in the wrong direction, too, falling 6% to $515 million, or $1.17 per share.
Image source: Costco.
Membership fees grew at a slower pace, ticking up by about 5.5%. That suggests the retailer may still be dealing with the aftermath from its co-branded credit card switchover that sent renewal rates lower last year.
Costco also announced that it will be raising its annual membership fees this summer. Regular members will be paying $5 more per year, or $60. Annual executive membership rates will rise by $10 to $120. Since the company gets most of its profits from fees rather than product sales, the move will immediately start boosting earnings growth as soon as it goes into effect on June 1. Costco would likely have preferred to see stronger sales growth and renewal trends before raising membership rates, but almost six years has passed since the last increase.
Big Lots sees more growth ahead in 2017
Shares of discount retailer Big Lots rose nearly 4% after the company closed out its third straight fiscal year showing flat or growing sales. Comps rose by 0.3% over the holidays to essentially repeat the prior quarter's flat result. However, even that tiny figure helped the company stand out from rivals given the weak industry trends. "I'm pleased to report a solid fourth quarter in what was a very difficult retail environment," CEO David Campisi said in a press release.
Better still, Big Lots avoided shrinking its sales base while at the same time improving profitability. Gross margin ticked up to 41.4% of sales from 40.9% a year ago.
Campisi and his team projected comparable-store sales growth of 1% to 2% for 2017, which would keep the company on the slow but steady pace it has managed in each of the last three fiscal years. Profitability should continue to expand, and cash flow is targeted to remain at just below $200 million. In a testament to the increasing confidence that management has about its fiscal position, Big Lots also announced a 19% boost to the dividend and a new share repurchase plan. Overall, the company plans to deliver $195 million to shareholders in 2017.
