Net income increased 16.4% to $348 million, or $0.79 per share. Revenue jumped 11% to $20.5 billion. Same-store sales increased 7% (or 4% without gasoline sales). International sales were a highlight; foreign comps increased 12% (or 8% without the gasoline impact). Apparently, Costco's not only luring U.S. customer traffic, but tapping into growth abroad as well.
Costco's making a better show of things than discounter Wal-Mart
In comparison, warehouse discount rival BJ's Wholesale
In a demonstration of Mr. Market's fickle ways, Costco's shares dropped in yesterday's trading. That's probably not too surprising, since its shares have been rising consistently lately, sporting a potentially premium price tag. Costco trades at about 24 times earnings, compared to Wal-Mart's price-to-earnings ratio of 12 or Target's P/E of 13.
I bought Costco for my Rising Stars portfolio in December on the strength of its excellent management, which takes employees, customers, and many other stakeholders into account. I consider it a "gold-standard stock," and in my opinion, it deserves a premium price. A company like Costco is so well-run -- and so well-loved by its customers -- that it's simply less risky than its rivals.
The market's temporary bearishness simply gives Fools an opportunity to snag Costco shares at a discount. Investors shopping for a high-quality stock for the long term shouldn't underestimate this great choice.