The 10-second takeaway
For the quarter ended Feb. 17 (Q2), Costco met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased significantly.
Margins grew across the board.
Costco booked revenue of $24.87 billion. The 22 analysts polled by S&P Capital IQ expected a top line of $25.06 billion on the same basis. GAAP reported sales were 8.3% higher than the prior-year quarter's $22.97 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 $1.10. The 26 earnings estimates compiled by S&P Capital IQ anticipated $1.05 per share. Non-GAAP EPS of $1.10 for Q2 were 22% higher than the prior-year quarter's $0.90 per share. GAAP EPS of $1.24 for Q2 were 38% higher than the prior-year quarter's $0.90 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 12.5%, 20 basis points better than the prior-year quarter. Operating margin was 3.0%, 20 basis points better than the prior-year quarter. Net margin was 2.2%, 50 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $24.35 billion. On the bottom line, the average EPS estimate is $1.03.
Next year's average estimate for revenue is $106.17 billion. The average EPS estimate is $4.53.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 4,511 members out of 4,675 rating the stock outperform, and 164 members rating it underperform. Among 1,351 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,328 give Costco a green thumbs-up, and 23 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 $105.10.
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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 recommends Costco Wholesale. The Motley Fool owns 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.
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