The 10-second takeaway
For the quarter ended Nov. 20 (Q1), Costco beat expectations slightly on revenues and met them on EPS. Margins contracted across the board.
Costco booked revenue of $21.6 billion. The 14 analysts polled by S&P Capital IQ expected to see sales of $21.4 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.80. The 20 earnings estimates compiled by S&P Capital IQ predicted $0.80 per share on the same basis. GAAP EPS of $0.73 for Q1 were 2.8% higher than the prior-year quarter's $0.71 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 12.5%, 40 basis points worse than the prior-year quarter. Operating margin was 2.5%, 20 basis points worse than the prior-year quarter. Net margin was 1.5%, 10 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $22.7 billion. On the bottom line, the average EPS estimate is $0.88. (There are 16 revenue estimates and 22 EPS estimates.)
For the full year ending 2012, the average estimate for revenue is $97.6 billion. The average EPS estimate is $3.85. (There are 24 revenue estimates and 23 EPS estimates.)
The stock has a five-star rating out of five at Motley Fool CAPS, with 4,183 members out of 4,338 rating the stock outperform and 155 members rating it underperform. Among 1,226 CAPS All-Star picks, 1,197 give Costco a green thumbs-up, and 29 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Costco is outperform, with an average price target of $82.90.
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