Costco's (NASDAQ:COST) quarterly results weren't too flashy, but who needs razzle-dazzle when you're talking about a great company for the long term? Costco's one of the most solid companies out there.
Fiscal first-quarter profit at Costco was basically flat, up 1.1%, to $266 million, or $0.60 per share. Although this isn't exactly a mind-blowing increase, the figure was in line with analysts' expectations. Net sales increased 6%, to $16.92 billion. Same-store sales increased 3% (taking out impacts from gasoline and currency).
Costco's same-store sales are definitely showing a step in the right direction compared to earlier quarters this year.
Costco's same-store sales (excluding gas and currency effects)
|
Q4 (Aug. 30, 2009) |
Q3 (May 5, 2009) |
Q2 (Feb. 15, 2009) |
|---|---|---|
|
1% |
2% |
5% |
Source: Company earnings releases.
Positive tidbits from the latest release included the fact that revenue from Costco's membership fees increased by 5%, and that its U.S. same-store sales increased 2% despite the lackluster environment.
The wholesaler also said non-food sales have been improving, which is definitely heartening given many folks' focus on necessities these days. Meanwhile, I'll bet some fans will be relieved that Costco and Coca-Cola (NYSE:KO) have fixed their pricing dispute. When I make trips to Costco, I often throw some of my beloved Diet Coke into the cart.
Given consumers' newfound thrift, stocks of discounters like Costco, BJ's Wholesale (NYSE:BJ), Wal-Mart (NYSE:WMT), and purveyors of cheap eats like McDonald's (NYSE:MCD) have a lot of appeal. These retailers are all about the deals, and that's an important component these days.
Of course, one might argue that Costco actually isn't much of a deal, stock-wise. (In fact, is Costco or BJ's the better buy for investors?) Costco's price-to-earnings ratio of 24 is quite pricy compared to that of comparable retailers. (BJ's is just 14, Wal-Mart's is 16.)
Still, Costco's one of the best-run retailers out there, and it has an awesome head honcho in Jim Sinegal. (Here's a video snippet of Jim Sinegal when he spoke at Fool HQ several months ago.) Frugal investors may want to wait for a cheaper price to get into the stock, but I'd say it's an investment that's perfect for long-term portfolios, regardless of near-term consumer spending pressures.
Throw some related Foolishness into your cart (there's no line!):
- Last quarter, we asked if Costco was kicking the recession to the curb.
- In May, it was time to stock up on Costco.
