Financial Data and Key Metrics - Net income for Q3 2024 was $1.68 billion, up from $1.3 billion in Q3 2023, with diluted EPS increasing to $3.78 from $2.93 [11] - Net sales increased by 9.1% to $57.39 billion compared to $52.6 billion in the same quarter last year [11] - Comparable sales growth was 6.6% (6.5% adjusted for gas inflation and FX), with U.S. comps at 6.2%, Canada at 7.7%, and other international markets at 7.7% [12] - E-commerce comp sales grew by 20.7%, both reported and adjusted for FX [12] - Membership fee income increased by 7.6% to $1,123 million, with renewal rates at 93% in the U.S. and Canada and 90.5% worldwide [12] - Gross margin rate improved by 52 basis points to 10.84%, driven by core margin improvements and lower gas inflation impact [13] Business Line Performance - Non-foods category showed the highest comp growth, driven by strong performance in toys, tires, lawn and garden, and health and beauty aids [18] - Bakery sales gained momentum with new product introductions like the Kirkland Signature Lemon Blueberry loaf and Morning Buns [18] - Food court sales were strong, particularly due to the success of the new chocolate chip cookie [19] - E-commerce growth was led by gold and silver bullion, gift cards, and appliances, with Costco Logistics deliveries up 28% [22] Market Performance - U.S. comp sales grew by 6.2%, while Canada and other international markets grew by 7.7% and 7.7% respectively [12] - Traffic increased by 6.1% worldwide and 5.5% in the U.S., with average transaction size up 0.5% globally and 0.7% in the U.S. [12] - Gasoline price inflation positively impacted sales by approximately 30 basis points, while foreign exchange had a negative impact of 20 basis points [12] Company Strategy and Industry Competition - The company continues to focus on delivering value to members through price reductions and high-quality Kirkland Signature products [19][20] - Expansion plans include opening 30 new warehouses in fiscal 2024, with a focus on the U.S., Japan, and Korea [17] - The company is enhancing its digital capabilities, with app downloads up 32% and site traffic increasing by 16% [22] - A new partnership with Uber Eats has been expanded to Canada and 17 U.S. states, with plans for further international expansion [23] Management Commentary on Operating Environment and Future Outlook - Management highlighted the importance of delivering value to members, especially as inflation has leveled off and consumers are returning to discretionary spending [18][19] - The company remains confident in its ability to maintain competitive pricing and drive member engagement through its value-focused strategy [19][20] - Management expressed optimism about the growth opportunities in both domestic and international markets, particularly in e-commerce and digital initiatives [22][23] Other Important Information - The company ended Q3 with 74.5 million paid household members, up 7.8% year-over-year, and 133.9 million cardholders, up 7.4% [12] - Executive memberships now represent over 46% of paid members and 73.1% of worldwide sales [13] - Capital expenditures for Q3 were approximately $1.06 billion, with full-year 2024 estimates between $4.3 billion and $4.5 billion [18] Q&A Session Summary Question: Membership Fee Increase - Management reiterated that membership fee increases are typically considered every five years, and while the company is beyond that cycle, no immediate changes are planned [26][27] - The company is focused on delivering value to members and ensuring that any fee increase would be justified by the value provided [26][27] Question: U.S. Expansion and Warehouse Growth - The company sees significant runway for new warehouse openings in the U.S., with a target of 25-30 new warehouses annually, half of which are expected to be in the U.S. [29][30] - Infill warehouses are strategically placed to reduce cannibalization and improve member shopping frequency [30][69] Question: Price Investments and Competitive Environment - The company does not plan to make significant price investments, as its everyday low-price strategy is already highly competitive [32] - Management is confident in its ability to maintain market share and drive member loyalty through value and quality [89][90] Question: Digital and E-commerce Strategy - The company is focused on improving its digital capabilities, including app functionality, site reliability, and personalized member experiences [40][41] - Costco Logistics is playing a key role in enhancing the e-commerce experience, particularly for large-ticket items like appliances [22][90] Question: Gross Margin and SG&A - The company maintains a gross margin cap of 14-15%, with no plans to change this threshold [37] - SG&A improved by 15 basis points in Q3, driven by higher labor productivity and cost discipline [15][73] Question: Gas Profitability and Traffic - Gas profitability was slightly lower in Q3, but overall traffic increased by 6.1%, with gas gallons up 5% [75][77] - The company sees gas as a key driver of member traffic and engagement [75][77] Question: Vertical Sourcing and Supply Chain - The company continues to explore vertical sourcing opportunities, particularly in areas like meat and optical products, but will only pursue these when necessary to ensure supply and value [63][64] Question: Retail Media and Personalization - The company sees significant opportunities in retail media and personalization, leveraging its unique member data to drive engagement and value [48][49] - IT spending will increase to support these initiatives, but it will remain within the normal course of business [52] Question: Discretionary Spending and Member Behavior - The company is seeing a return to discretionary spending, particularly in categories like home goods, toys, and sporting goods [43][61] - Management believes the company is gaining market share in these categories, driven by its value proposition [96][97] Question: Costco Next and Marketplace Model - Costco Next is seen as a significant growth opportunity, allowing the company to expand its product offerings and provide additional value to members [110][111] - The marketplace is curated to ensure that products align with the company's value-focused strategy [111][122]

Thursday, May 30th, 2024The second half of May has proven confusing for the markets. After major indices were more or less on a similar trajectory off April’s pullback, we saw the Nasdaq keep climbing higher — largely on the perceptions of the A.I. market following NVIDIA’s (NVDA) earnings report a week ago, while the small-cap Russell 2000 started to wane and the blue-chip Dow flatlined before sinking this week.The S&P 500 has been similarly range-bound over these past couple weeks, as well. Today, the Dow ...

Costco (COST) reported $58.52 billion in revenue for the quarter ended May 2024, representing a year-over-year increase of 9.1%. EPS of $3.78 for the same period compares to $3.43 a year ago. ...

Costco Wholesale beat third-quarter revenue expectations on Thursday, as cash-strapped consumers flocked to its warehouses to grab low-priced groceries and discretionary items. The membership-only retailer saw resilient demand for its groceries and bakery items as consumers grappling with still-high cost of living preferred cooking more meals at home.With consumers trading down to shop for low-priced goods across product categories, the company also saw steady demand for its low-priced discretionary items. ...

Q3 2024Analyst Estimates for Q3 2024Q3 2023Revenue$58.52 billion$57.92 billion$53.65 billionDiluted Earnings per Share$3.78$3.68$2.93Net Income$1.68 billion$1.63 billion$1.3 billion Investors will hear from Costco's new chief financial officer (CFO) in the company's earnings call for the first time Thursday, with former Kroger (KR) CFO Gary Millerchip assuming the role during the latest quarter. Longtime CFO Richard Galanti stepped down from the position in March after a nearly four-decade run as the retail ...

Costco isn't ready to raise its membership fee, but says it's still a matter of when, not if.The wholesale club last raised fees in 2017, and about every five years before that.Membership fees represent more than half the company's operating income. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. Email address By clicki ...

Financial Performance - Net sales for Q3 2024 increased by 9.1% to $57.39 billion, compared to $52.60 billion in Q3 2023[2] - Net income for Q3 2024 was $1.68 billion, or $3.78 per diluted share, up from $1.30 billion, or $2.93 per diluted share in Q3 2023[5] - Comparable sales for the U.S. increased by 6.2% in Q3 2024, while total company comparable sales rose by 6.6%[4] - E-commerce sales surged by 20.7% in Q3 2024, reflecting strong online demand[4] - Membership fees for Q3 2024 totaled $1.12 billion, an increase from $1.04 billion in Q3 2023[10] - Total revenue for the first 36 weeks of fiscal 2024 reached $174.76 billion, up 7.0% from $163.35 billion in the same period last year[10] - The company reported an operating income of $2.20 billion for Q3 2024, up from $1.68 billion in Q3 2023[10] Assets and Liabilities - Total current assets decreased to $33.29 billion as of May 12, 2024, down from $35.88 billion as of September 3, 2023[12] - Total liabilities increased to $46.14 billion as of May 12, 2024, compared to $43.94 billion as of September 3, 2023[12] Cash Flow and Investments - Net cash provided by operating activities rose to $8,381 million, compared to $7,343 million, reflecting an increase of 14.2%[13] - Cash used in investing activities decreased to $2,706 million from $3,147 million, a reduction of 14.0%[13] - Net cash used in financing activities significantly increased to $8,948 million from $1,950 million, indicating a rise of 359.4%[13] - Cash and cash equivalents at the end of the year were $10,404 million, down from $12,493 million, a decrease of 16.7%[13] Expenses - Depreciation and amortization expenses increased to $1,531 million from $1,389 million, an increase of 10.2%[13] - Stock-based compensation rose to $686 million, compared to $643 million, reflecting a growth of 6.7%[13] - The company reported a non-cash lease expense of $220 million, down from $300 million, a decrease of 26.7%[13] Working Capital and Exchange Rates - Changes in working capital contributed $966 million, up from $438 million, an increase of 120.1%[13] - The effect of exchange rate changes on cash and cash equivalents resulted in a loss of $23 million, compared to a gain of $44 million[13] Operational Overview - Costco operates 878 warehouses globally, with 605 located in the U.S. and Puerto Rico[5]

ISSAQUAH, Wash., May 30, 2024 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the third quarter (twelve weeks) and the first 36 weeks of fiscal 2024, ended May 12, 2024. Net sales for the quarter increased 9.1 percent, to $57.39 billion, from $52.60 billion last year. Net sales for the first 36 weeks increased 7.0 percent, to $171.44 billion, from $160.28 billion last year. Net sales were positively impacted by approximate ...