I aim to invest in companies with perfect qualitative attributes, buy them at an attractive price based on fundamentals, and hold them forever. I hope to publish articles covering such companies approximately 3 times per week, with extensive quarterly follow-ups and constant updates.I manage a concentrated portfolio targeted at avoiding losers and maximizing exposure to big winners. This means that often I'll rate great companies at a 'Hold' because their growth opportunity is below my threshold, or their d ...

Core Insights - Costco Wholesale Corporation reported first-quarter fiscal 2025 results with both top and bottom lines exceeding Zacks Consensus Estimates and showing year-over-year growth [1][2] Financial Performance - Adjusted earnings per share (EPS) for the quarter were $3.82, surpassing the Zacks Consensus Estimate of $3.79, and reflecting a 9.8% increase from the prior year [2] - Total revenues reached $62,151 million, a 7.5% increase year over year, also exceeding the Zacks Consensus Estimate of $62,045 million [3] - Net sales rose 7.5% year over year to $60,985 million, while membership fees increased by 7.8% to $1,166 million [6] Comparable Sales Growth - Comparable sales grew by 5.2% year over year, slightly below the estimated 5.4% increase, with U.S. comparable sales also at 5.2% [4] - Comparable sales excluding gasoline prices and foreign exchange impacts rose 7.1%, with U.S. comparable sales increasing by 7.2% [7] Membership and Customer Engagement - Membership renewal rate stood at 90.4%, indicating strong customer loyalty [5] - The number of paid household members increased by 7.6% to 77.4 million, while total cardholders grew by 7.2% to 138.8 million [6] E-commerce and Margins - E-commerce comparable sales rose 13% year over year, or 13.2% when excluding gasoline prices and currency fluctuations [8] - Gross margin expanded by 24 basis points to 11.3%, and operating income grew by 10.7% to $2,196 million [8] Store Operations and Expansion - Costco operates 897 warehouses globally, with plans to open 29 new warehouses in fiscal 2025, including three relocations [9][10] Financial Health - The company ended the quarter with cash and cash equivalents of $10,907 million and long-term debt of $5,745 million [11] - Capital expenditures for the quarter were approximately $1.26 billion, with an anticipated $5 billion for fiscal 2025 [11]

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Stock-split euphoria took over Wall Street in 2024, and two brand-name companies could continue this trend in the new year.In case you haven't noticed, the stock market has been practically unstoppable in 2024. The iconic Dow Jones Industrial Average, benchmark S&P 500, and growth-focused Nasdaq Composite have reached multiple record highs and respectively risen by 17%, 27%, and 31% this year, as of the closing bell on Dec. 10.Although excitement surrounding the rise of artificial intelligence (AI) and Dona ...

Core Insights - Costco is experiencing a shift in consumer behavior towards "food at home," leading to increased sales in meat and produce categories [3][4] - The company reported Q1 2025 sales of $60.99 billion, reflecting a 7.5% increase from the previous year [4] - Membership numbers rose by 7.2% year-over-year, reaching nearly 139 million cardholders [5] Sales Performance - Strong growth in sales attributed to a shift in dining habits, with consumers opting for home-cooked meals over dining out [2][6] - The increase in sales is particularly noted in lower-priced food items, including poultry, beef, and pork [4] Market Trends - The trend of eating at home is echoed by other retailers and fast-food chains, indicating a broader industry shift due to inflation and high food prices [6][7] - Walmart reported that eating out is approximately 4.3 times more expensive than eating at home, which is driving more customers to grocery stores [8]

Financial Data and Key Metrics - Net income for Q1 2025 was $1.798 billion, up from $1.589 billion in Q1 2024, representing a 9.9% growth excluding discrete tax items [16] - Net sales increased by 7.5% to $60.99 billion compared to $56.72 billion in the same quarter last year [17] - US comparable sales grew by 5.2%, or 7.2% excluding gas deflation, while Canada comp sales increased by 5.8%, or 6.7% adjusted for gas deflation and FX [17] - E-commerce comp sales surged by 13%, or 13.2% adjusted for FX [18] - Membership fee income rose by 7.8% to $1.166 billion, driven by growth in paid memberships [20] Business Line Performance - US bakery division sold a record 4.2 million pies in the three days before Thanksgiving [10] - US food courts sold 274,000 whole pizzas on Halloween, a 21% increase year-over-year [10] - US pharmacy business saw prescription growth exceed 19%, setting new volume records [11] - Costco Logistics completed nearly 1 million deliveries in Q1, with over 196,000 deliveries in the last week alone, a new record [11] - Fresh food sales led the way with high single-digit growth, while non-foods also saw high single-digit growth despite calendar shifts [31][32] Market Performance - US comp sales grew by 5.2%, or 7.2% excluding gas deflation [17] - Canada comp sales increased by 5.8%, or 6.7% adjusted for gas deflation and FX [17] - Other international comp sales rose by 4.7%, or 7.1% adjusted for gas deflation and FX [17] - E-commerce comp sales grew by 13%, or 13.2% adjusted for FX [18] Strategic Direction and Industry Competition - The company plans to open 29 new warehouses in fiscal 2025, with 10 located outside the US [9] - Costco continues to focus on delivering value through Kirkland Signature products, with price reductions on items like organic peanut butter and chicken stock [34] - The company is investing in retail media, with a successful campaign achieving 2-3x the expected return on ad spend [45] - Costco is also enhancing its digital capabilities, with the US app downloaded 2.9 million times in Q1, bringing total downloads to approximately 42 million [43] Management Commentary on Operating Environment and Future Outlook - Management noted that inflation was essentially flat in Q1, with slight inflation in food and sundries offset by deflation in non-foods [40] - The company is monitoring potential port strikes in India, the East Coast, and Canada, and adapting plans to ensure inventory availability [42] - Costco expects to continue growing its digital business, with e-commerce traffic, conversion rates, and average order value all increasing year-over-year [43] Other Important Information - The company opened seven new warehouses in Q1, including one relocation, and plans to open 29 new warehouses in fiscal 2025 [7][9] - Costco's sustainability commitments were updated and made available online, reflecting progress toward sustainability objectives [14] - The company's renewal rates were slightly impacted by higher growth in digital sign-ups, which renew at a lower rate than the base [22] Q&A Summary Question: Consumer Health and Seasonal Inventory - The company noted strong performance in non-food categories, with double-digit growth in gold, jewelry, gift cards, and home furnishings [52] - Seasonal sell-through was strong, with furniture, appliances, and sporting goods driving e-commerce sales [55] Question: Traffic Growth and Retail Media - Traffic increased by 5.1% worldwide, with items per basket up 2% in the US and worldwide [60] - Retail media is seen as an incremental opportunity, with early success in off-site campaigns [63] Question: Core Margin Performance - Core margins were up 17 basis points excluding gas deflation, driven by mix and the credit card co-brand program [116] - The company continues to invest in price reductions, particularly for Kirkland Signature products [72] Question: Membership Renewal Rates and Digital Sign-ups - Digital sign-ups are renewing at a slightly lower rate than the base, impacting overall renewal rates [79] - Costco Next, the company's exclusive member-only marketplace, is expected to enhance member relationships [81] Question: Stock Split and Tariffs - The company has no current plans for a stock split but will continue to evaluate the option [89] - Tariffs are seen as a cost-raising factor, but the company is prepared to manage through inventory adjustments and alternative sourcing [92] Question: CapEx and Growth Strategy - CapEx for fiscal 2025 is estimated at $5 billion, with continued investment in new warehouses and technology [101] - The company plans to open 30 warehouses annually, with a significant portion outside the US [112] Question: E-commerce Penetration and Private Label - E-commerce penetration is around 7-8% of total sales, with private label penetration reaching 33% in the US [135][137] Question: Competitive Landscape - The company sees itself as its own biggest competitor, with new warehouse openings driving incremental growth [153] - Scan and Go technology is not currently a priority, with focus on improving the front-end experience [158] Question: New Categories and Margin Impact - New categories like precious metals and gift cards are driving traffic and cross-selling, with no need to offset margin impact through other items [170] Question: Affluent Shopper Wallet Share - The company believes it has the right to earn more wallet share with higher-income shoppers through quality and value offerings [180] Question: Partnerships with Instacart and Uber - Partnerships with Instacart and Uber are growing strongly, enhancing delivery speed and convenience for members [191] Question: Labor Relations - The company is committed to fair and timely negotiations with the Teamsters union, maintaining a 40-year track record of positive relations [195] Question: International Performance - International performance remains strong, with no significant changes in regional trends [202] Question: Digital Business and Online Presence - The company is focused on improving its online presence, with recent enhancements to search functionality and inventory visibility [206] - Digital sign-ups are growing, but executive membership conversions are lower online due to lack of employee interaction [211]

Costco is proving that its digital transformation is more than just a buzzword — it’s driving growth. As the company continues to enhance its eCommerce offerings and streamline member experiences, its first-quarter results (Q3 by the calendar) for fiscal 2025 illustrate a combination of solid online performance and in-store success.Digital growth played a major role Thursday (Dec. 12) during the company’s earnings call as eCommerce sales rose 13%, site traffic grew 16%, and average order value increased 4%. ...

Costco (COST) reported $62.15 billion in revenue for the quarter ended November 2024, representing a year-over-year increase of 7.5%. EPS of $3.82 for the same period compares to $3.48 a year ago.The reported revenue represents a surprise of +0.17% over the Zacks Consensus Estimate of $62.05 billion. With the consensus EPS estimate being $3.79, the EPS surprise was +0.79%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street e ...

Thursday, December 12, 2024Stock market indexes had a down day from the start: higher producer prices from November’s PPI report and a notable increase in Weekly Jobless Claims ahead of the open today set the scene. We’re still near all-time highs on the major indexes, so taking a breather with less-than-stellar economic prints seems perfectly reasonable.Attention will now turn to next week’s Federal Open Market Committee (FOMC) meeting, where on Wednesday afternoon the latest decision on interest rates wil ...

Costco (COST) came out with quarterly earnings of $3.82 per share, beating the Zacks Consensus Estimate of $3.79 per share. This compares to earnings of $3.48 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 0.79%. A quarter ago, it was expected that this warehouse club operator would post earnings of $5.05 per share when it actually produced earnings of $5.15, delivering a surprise of 1.98%.Over the last four quarters, the com ...