The 10-second takeaway
For the quarter ended Sep. 2 (Q4), Costco beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share grew significantly.
Gross margins were steady, operating margins grew, net margins grew.
Costco reported revenue of $32.22 billion. The 18 analysts polled by S&P Capital IQ expected to see net sales of $31.71 billion on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $28.18 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 $1.39. The 26 earnings estimates compiled by S&P Capital IQ anticipated $1.31 per share. GAAP EPS of $1.39 for Q4 were 29% higher than the prior-year quarter's $1.08 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 12.4%, about the same as the prior-year quarter. Operating margin was 2.9%, 20 basis points better than the prior-year quarter. Net margin was 1.9%, 20 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $23.19 billion. On the bottom line, the average EPS estimate is $0.92.
Next year's average estimate for revenue is $105.11 billion. The average EPS estimate is $4.46.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 4,377 members out of 4,531 rating the stock outperform, and 154 members rating it underperform. Among 1,245 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,221 give Costco a green thumbs-up, and 24 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 $93.18.
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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 recommend 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.