On Dec. 14, 2006, warehouse retailer Costco (NASDAQ:COST) released its first-quarter earnings for the period ended Nov. 26.

  • Total sales at this big box retailer were just over 9%. Same-store sales rose 4%.
  • Margins were flat, which is not a surprise; Costco caps in gross margins to pass as much savings on the customers to thus keep them renewing their memberships.
  • Is it any wonder that 571 of 597 investors think Costco will outperform the S&P 500 in CAPS, our new community intelligence service? After all, this Stock Advisor selection has a pretty passionate following. What do you think? Sign up today and let your voice be heard.

(Figures in millions, except per-share data)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$14,151.6

$12,933.3

9.4%

Net Profit

$236.9

$215.8

9.8%

EPS

$0.51

$0.45

13.3%

Diluted Shares

467.8

486.4

(3.8%)



Get back to basics with a look at the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

12.5%

12.4%

0.1

Operating Margin

2.5%

2.5%

(0.0)

Net Margin

1.7%

1.7%

0.0

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q1 2007*

Q1 2006

Change

Cash + ST Invest.

$2,614.0

$3,289.5

(20.5%)

Inventory

$5,389.0

$4,825.3

11.7%



Liabilities

Q1 2007*

Q1 2006

Change

Accounts Payable

$5,538.0

$4,859.5

14%

Long-Term Debt

$175.0

$546.8

(68%)

*First-quarter data from the conference call

Learn the ways of the balance sheet.

Cash Flow Highlights

I may love its stores, but I don't like the lack of a cash flow statement with the press release.

Find out why Fools always follow the money.

Related Companies:

  • Wal-Mart (NYSE:WMT)
  • Target (NYSE:TGT)
  • Sears Holdings (NASDAQ:SHLD)

Related Foolishness:

Wal-Mart is a Motley Fool Inside Value recommendation.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, David Meier did not own shares in any of the companies mentioned. Fool rules for disclosure are here.