Costco Q1 Earnings Beat Estimates, Comparable Sales Rise 5.2% Y/Y

Costco Wholesale Corporation COST posted first-quarter fiscal 2025 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and increased year over year. The company also registered decent comparable sales growth during the quarter.Costco’s Quarterly Performance: Key Metrics and InsightsCostco reported adjusted earnings of $3.82 per share for the quarter under review, surpassing the Zacks Consensus Estimate of $3.79. The adjusted quarterly number increased by 9.8% from the prior-year quarter. Including a tax benefit of $100 million (or 22 cents per share) related to stock-based compensation, quarterly earnings came in at $4.04 per share.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Total revenues, comprising net sales and membership fees, reached $62,151 million, marking a 7.5% increase from the year-ago quarter. The metric also came ahead of the Zacks Consensus Estimate of $62,045 million.Costco’s comparable sales rose 5.2% year over year in the quarter, falling short of our estimate of a 5.4% increase. Comparable sales in the United States grew 5.2%, while Canada and Other International markets saw increases of 5.8% and 4.7%, respectively.Costco’s strategic investments, customer-centric approach and merchandise initiatives, along with its emphasis on membership growth, have helped it capture market share and maintain steady revenue growth. By prioritizing value and quality, the company has built strong customer loyalty, leading to an impressive membership renewal rate of 90.4% in the quarter.Costco Wholesale Corporation Price, Consensus and EPS Surprise Costco Wholesale Corporation price-consensus-eps-surprise-chart | Costco Wholesale Corporation QuoteCostco Achieves Membership Growth and Improved MarginsCostco's net sales rose 7.5% year over year to $60,985 million, while membership fees increased 7.8% to $1,166 million in the reported quarter. The company ended the quarter with 77.4 million paid household members, up 7.6% from the prior year. The number of total cardholders grew 7.2% to reach 138.8 million.Traffic or shopping frequency improved by 5.1% globally and 4.9% in the United States, while the average transaction or ticket grew by 0.1% worldwide and 0.3% in the United States.Comparable sales, excluding gasoline prices and foreign exchange impacts, rose 7.1%. In the United States, comparable sales increased by 7.2%, while Canada and Other International markets saw gains of 6.7% and 7.1%, respectively. Costco’s e-commerce performance was strong, with comparable sales rising 13% year over year, or 13.2%, after excluding the impact of gasoline prices and currency fluctuations.The gross margin expanded 24 basis points year over year to 11.3%, exceeding our estimate of a year-over-year flat margin. The operating income grew 10.7% to $2,196 million, while the operating margin improved by 10 basis points to 3.5%, falling short of our anticipated 20 basis-point expansion.Costco's Store Updates and Expansion PlansCostco currently operates 897 warehouses. These include 617 in the United States and Puerto Rico, 109 in Canada, 41 in Mexico, 36 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.During the quarter under discussion, Costco opened seven warehouses, including one relocation. Of the six new warehouses opened, four were outside the United States. After the end of the quarter, one warehouse was inaugurated in Pleasanton, CA. For fiscal 2025, management plans to open 29 warehouses, including three relocations.Costco’s Financial Health SnapshotCostco ended the reported quarter with cash and cash equivalents of $10,907 million and long-term debt (excluding the current portion) of $5,745 million. Shareholders’ equity was $24,451 million. Management incurred capital expenditures of roughly $1.26 billion in the quarter. Costco foresees capital expenditures of about $5 billion for fiscal 2025.Shares of this Zacks Rank #3 (Hold) company have advanced 15.5% in the past six months compared with the industry’s rise of 10.5%.Don’t Miss These Solid BetsSprouts Farmers SFM, which is engaged in the retailing of fresh, natural and organic food products, currently sports a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 15.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings implies growth of 12.2% and 29.6%, respectively, from the year-ago reported numbers.Freshpet Inc. FRPT manufactures, distributes and markets natural fresh meals and treats for dogs and cats. It currently carries a Zacks Rank #2 (Buy). FRPT has a trailing four-quarter earnings surprise of 144.5%, on average.The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings implies growth of 27.3% and 228.6%, respectively, from the prior-year reported levels.US Foods Holding USFD, one of America’s great food companies and a leading foodservice distributor, currently carries a Zacks Rank #2. The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings suggests growth of 6.4% and 18.6%, respectively, from the prior-year reported levels.Free Report: 5 Clean Energy Stocks with Massive UpsideEnergy is the backbone of our economy. It’s a multi-trillion dollar industry that has created some of the world’s largest and most profitable companies.Now state-of-the-art technology is paving the way for clean energy sources to overtake “old-fashioned” fossil fuels. Trillions of dollars are already pouring into clean energy initiatives, from solar power to hydrogen fuel cells.Emerging leaders from this space could be some of the most exciting stocks in your portfolio.Download Nuclear to Solar: 5 Stocks Powering the Future to see Zacks’ top picks free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Costco Wholesale Corporation (COST): Free Stock Analysis Report Freshpet, Inc. (FRPT): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report US Foods Holding Corp. (USFD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks