The 10-second takeaway
For the quarter ended Feb. 12 (Q2), Costco met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased, and GAAP earnings per share increased.
Gross margins shrank, operating margins dropped, and net margins were steady.
Costco logged revenue of $22.97 billion. The 21 analysts polled by S&P Capital IQ foresaw revenue of $22.76 billion on the same basis. GAAP reported sales were 10% higher than the prior-year quarter's $20.88 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.90. The 26 earnings estimates compiled by S&P Capital IQ anticipated $0.87 per share. GAAP EPS of $0.90 for Q2 were 14% higher than the prior-year quarter's $0.79 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 12.3%, 30 basis points worse than the prior-year quarter. Operating margin was 2.8%, 20 basis points worse than the prior-year quarter. Net margin was 1.7%, about the same as the prior-year quarter.
Next quarter's average estimate for revenue is $21.98 billion. On the bottom line, the average EPS estimate is $0.87.
Next year's average estimate for revenue is $97.73 billion. The average EPS estimate is $3.85.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,239 members rating the stock outperform and 152 members rating it underperform. Among 1,230 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,203 give Costco a green thumbs-up, and 27 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Costco is hold, with an average price target of $84.13.
While many retailers continue to struggle in these tough economic time, a select few are changing the face of the business, and reaping outsized rewards. Is Costco the right stock for you? Read "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail" and decide. Click here for instant access to this free report.
- Add Costco to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Costco Wholesale. Motley Fool newsletter services have recommended buying shares of Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.