Costco Membership Growth Slows, Yet Q1 Earnings Beat Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Fool
- Membership Growth Slowdown: Costco's recent quarter saw only 400,000 new memberships compared to the typical 1 million, with management attributing this to younger members signing up online and renewing at a slower pace, a trend expected to persist for a few more quarters.
- Strong Quarterly Performance: Despite the stock price decline, Costco reported earnings per share of $4.50, surpassing Wall Street's estimate of $4.27, with revenue increasing 8% to $67.3 billion, indicating robust growth potential for the company.
- Significant Sales Growth: Comparable sales rose 5.9% in the U.S. and 6.4% overall, while digital sales surged by 20.5%, website traffic increased by 24%, and mobile app traffic jumped 48%, demonstrating sustained consumer demand for Costco's offerings.
- Continued Member Loyalty: Costco currently has 81.4 million paid members, a 5.2% increase from the previous year, with North American renewal rates at 92.2%, slightly below historical averages, yet still reflecting strong customer loyalty.
COST
$871.86+Infinity%1D
Analyst Views on COST
Wall Street analysts forecast COST stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for COST is 1092 USD with a low forecast of 907.00 USD and a high forecast of 1218 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
24 Analyst Rating
16 Buy
8 Hold
0 Sell
Moderate Buy
Current: 854.790
Low
907.00
Averages
1092
High
1218
Current: 854.790
Low
907.00
Averages
1092
High
1218
About COST
Costco Wholesale Corporation (Costco) operates membership warehouses and e-commerce sites that offer a selection of nationally branded and private-label products in a wide range of categories. The Company buys the majority of its merchandise directly from suppliers and route it to cross-docking consolidation points (depots) or directly to its warehouses. It operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden. It also operates e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia. The Company provides wide selection of merchandise, plus the convenience of specialty departments and exclusive member services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
