Costco Wholesale (COST) stock is struggling Friday after the membership warehouse's appearance on the earnings calendar. While COST beat revenue and earnings expectations for its fiscal 2024 third quarter, the company kept membership fees unchanged at current rates.
In the 12 weeks ended May 12, Costco's revenue increased 9.1% year-over-year to $58.5 billion. Comparable store sales were up 6.5% when excluding the impacts from changes in gasoline prices and foreign exchange, while e-commerce sales surged 21% on strong demand for gold bars and silver coins.
COST also said its earnings per share (EPS) jumped 29% from the year-ago period to $3.78.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The top- and bottom-line results cruised past analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $58.1 billion and earnings of $3.70 per share.
When asked on the conference call about a possible membership fee increase, Costco Chief Financial Officer Gary Millerchip said that even though the company is well beyond the typical five years for an increase, it is still evaluating "high inflation and the risk and concern around recession" to determine when the right time will be to raise fees.
Costco also eased concerns about raising the price of its $1.50 hot dogs. Although the company cut off access to non-members earlier this year, Millerchip confirmed in the earnings call that the "price is safe."
Is Costco stock a buy, sell or hold?
Overall, analysts remain generally upbeat toward the retail giant. According to S&P Global Market Intelligence, the consensus analyst target price for COST stock is $805.82, representing implied upside of about 1% to current levels. Meanwhile, the consensus recommendation is a Buy.
Financial services firm UBS is one of the most bullish firms on Costco stock with a Buy rating and a $940 price target.
"COST posted yet another quarterly result which indicated continued significant market share gains and broad-based strength across the business, with its worldwide traffic growing 6% year-over-year, discretionary business outperforming, and its operating margin reaching the highest quarterly level in nearly 24 years," UBS Global Research Michael Lasser said in a report. "We think COST will likely have even more levers to increase its dominance in the retail industry in the coming years."
The $940 price target represents implied upside of about 18% to current levels.
Related Content
-
Visa Is the Worst Dow Stock Wednesday. Here's WhyVisa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
-
Another Analyst Moves to the Sidelines on Tesla Stock After EarningsTesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
-
Visa Is the Worst Dow Stock Wednesday. Here's Why
Visa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
-
Tesla Stock: Another Analyst Moves to the Sidelines After Earnings
Tesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
-
Alphabet Stock Falls as Q2 Ad Revenue Growth SlowsAlphabet stock is trading lower Wednesday as slowing ad sales growth offsets a Q2 earnings beat. Here's what you need to know.
-
Stock Market Today: Stocks Slip Ahead of Mega-Cap EarningsGE Aerospace shares soared after earnings while United Parcel Service stock slumped.
-
Is GE Stock Still a Buy After Big Earnings Beat?GE stock is higher Tuesday after the industrial giant's beat-and-raise quarter, but what do analysts think? We take a closer look here.
-
UPS Stock Heads Toward Worst Day Ever After EarningsUPS stock is down big after coming up short of analysts’ expectations for its second quarter and cutting its outlook. Here’s what you need to know.
-
Spotify Stock Surges After Q2 Earnings Beat: What to KnowSpotify stock is flying higher Tuesday after the streaming giant reported its second-quarter earnings results. Here's what you need to know.
-
Stock Market Today: Mega-Cap Tech Rallies to Drag Markets HigherMarkets focused on upcoming earnings from Magnificent 7 stocks rather than chaos in D.C.
