Core Insights - Costco's shares have seen a significant increase of 40% in 2024 and an additional 7% in 2025, outperforming the S&P 500's 2% growth, driven by a robust membership model and value-oriented offerings [3][4] - In fiscal Q3 2025, Costco reported revenues of $63.2 billion and an operating profit of $2.5 billion, with $1.2 billion coming from membership fees, highlighting the importance of recurring revenue [3][5] - The company's valuation is high, trading at 55 times earnings and 59 times free cash flow, resulting in a cash flow yield of only 1.7%, which raises concerns about potential volatility [4][9] Business Model Strength - Costco achieved earnings per share of $4.28 in Q3 2025, a 13% year-over-year increase, with comparable-store sales rising by 8% and e-commerce growing nearly 15% [5][6] - Membership renewal rates are strong at 92.7% in the U.S. and Canada, and 90.2% globally, with total household memberships increasing by 6.6% [5] Competitive Positioning - Costco's U.S. same-store sales growth of 8% outperformed Walmart's 4.5% and Target's decline of 3.8%, indicating the effectiveness of its warehouse model for value-oriented consumers [6] - The company operates 905 warehouses globally, leveraging thin margins and its private-label brand, Kirkland Signature, to maintain pricing advantages [7] Supply Chain and Operational Efficiency - Costco's supply chain flexibility allows it to manage tariffs effectively, with two-thirds of merchandise sourced domestically and limited exposure to trade risks [8] - The company is localizing Kirkland production and experiencing steady demand for essential goods, which supports its pricing power [8] Valuation Concerns - Despite solid revenue growth, Costco's expansion has slowed to less than 3% for the fiscal year, raising questions about the sustainability of its high valuation [9] - If comparable sales growth trends towards mid-single digits, investor confidence and Costco's valuation multiple may face pressure [9]

Company and Industry Summary Company Overview - The company reported net sales of **$20.97 billion** for the month, representing an increase of **6.8%** from **$19.64 billion** in the same period last year [3] Sales Performance - Comparable sales results for the month were as follows: - **U.S.**: **4.1%** - **Canada**: **3.3%** - **Other International**: **6.6%** - **Total Company**: **4.3%** - **E-commerce**: **11.6%** [3] - When excluding impacts from changes in gasoline prices and foreign exchange, comparable sales were: - **U.S.**: **5.5%** - **Canada**: **6.3%** - **Other International**: **8.4%** - **Total Company**: **6%** - **E-commerce**: **12%** [4] Traffic and Transaction Insights - Comparable traffic or frequency increased by **3.4%** worldwide and **2.8%** in the U.S. [4] - The average worldwide selling price per gallon of gas decreased by approximately **10.4%** year-over-year [5] - Average transaction value increased by **0.9%**, and when excluding gas deflation and foreign exchange, it was up **2.5%** [5] Regional Performance - Strongest comparable sales in the U.S. were observed in the **Northwest**, **Midwest**, and **Los Angeles** regions [6] - Internationally, the best results were in **Mexico**, **Taiwan**, and **Korea** [6] Merchandising Highlights - Foods and sundries showed positive mid to high single-digit growth, with strong performance in: - **Cooler** - **Candy** - **Frozen Foods** - Fresh foods increased by high single digits, particularly in: - **Meat** - **Bakery** - Non-foods also performed well with mid single-digit growth, especially in: - **Jewelry** - **Majors** - **Gift Cards** - Ancillary business sales declined by low to mid single digits, while pharmacy, optical, and hearing aid departments were top performers [7][8] Challenges and Risks - The negative impact of foreign currencies on total and comparable sales was approximately: - **Canada**: **-1.6%** - **Other International**: **-1.0%** - **Total Company**: **-0.4%** [5] - Gas price deflation negatively impacted total reported comparable sales by approximately **-1.3%** [5] - The negative impact of cannibalization was approximately **-70 basis points** for the company in May [6] Future Outlook - The upcoming June reporting period will include five weeks, starting from June 2 and ending July 6, compared to the previous year's five weeks from June 3 to July 7 [8]

Market Overview - U.S. stocks experienced gains on Monday, with the S&P 500 increasing by 0.41% to 5,935.94, the Nasdaq rising by 0.67% to 19,242.61, and the Dow Jones Industrial Average edging up by 35.41 points, or 0.08%, to finish at 42,305.48, despite ongoing global trade concerns [1] U.S.-China Relations - Market participants are expected to closely monitor developments in U.S.-China relations, as changes could significantly impact market sentiment [2] Importance of Financial Analysis - Investors often rely solely on sales and earnings figures, which may not accurately reflect a company's ability to meet financial obligations; thus, a critical analysis of a company's financial background is essential for informed investment decisions [3][2] Interest Coverage Ratio - The interest coverage ratio is a key metric used to assess how effectively a company can pay interest on its debt, calculated as Earnings before Interest & Taxes (EBIT) divided by Interest Expense [5][6] - A higher interest coverage ratio indicates a greater ability to meet interest obligations, while a ratio below 1 suggests potential default risks [8] Stock Recommendations - Four companies, Sterling Infrastructure, BJ's Wholesale Club, Molina Healthcare, and Halozyme Therapeutics, exhibit strong interest coverage ratios and are recommended for consideration [4][11] - These companies also demonstrate high EPS growth and favorable Zacks Ranks, indicating robust performance potential [11][14][15][16] Company Performance Highlights - Sterling Infrastructure (STRL) has a projected EPS growth of 38.5% and has risen 68.4% over the past year [14] - BJ's Wholesale Club (BJ) shows projected sales and EPS growth of 5.6% and 5.9%, respectively, with a stock increase of 29.1% in the past year [15] - Molina Healthcare (MOH) anticipates sales and EPS growth of 8.4% and 7.8%, respectively, although the stock has declined by 3.3% in the past year [16] - Halozyme Therapeutics (HALO) expects sales and EPS growth of 22.1% and 23.6%, respectively, with a stock increase of 25.6% in the past year [17]

Financial Results Announcement - PriceSmart, Inc. plans to release financial results for the third quarter of fiscal year 2025 on July 10, 2025, after market close [1] - A conference call to discuss the financial results will be held on July 11, 2025, at 12:00 p.m. Eastern time [1] Expansion Plans - The company has purchased land for its sixth warehouse club in the Dominican Republic, located in La Romana, approximately 73 miles from the nearest club in Santo Domingo [2] - The new club is expected to open in the spring of 2026, bringing the total number of warehouse clubs operated by PriceSmart to 57 [2][3] - Additionally, PriceSmart plans to open another warehouse club in Quetzaltenango, Guatemala, in the summer of 2025 [3] Company Overview - PriceSmart operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, currently managing 55 clubs across 12 countries and one U.S. territory [3] - The countries include ten clubs in Colombia, nine in Costa Rica, seven in Panama, and others in Guatemala, Dominican Republic, Trinidad, El Salvador, Honduras, Nicaragua, Jamaica, Aruba, Barbados, and the U.S. Virgin Islands [3]

The sign on the side of a Costco is seen in Hawthorne, California, on April 4, 2025.Costco on Thursday posted quarterly earnings and revenue that topped estimates as its sales climbed 8%. Here's how the warehouse club retailer did in its fiscal third quarter compared what Wall Street was expecting, based on a survey of analysts by LSEG:Earnings per share: $4.28 vs. $4.24 expectedRevenue: $63.21 billion vs. $63.19 billion expectedCostco's net income for the three-month period that ended May 11 rose to $1.90 ...

Core Viewpoint - Costco Wholesale Corporation is preparing to release its third-quarter fiscal 2025 earnings results, with investors weighing the decision to buy or hold the stock based on earnings expectations and market conditions [1] Financial Performance Expectations - Analysts project third-quarter revenues to reach $63.1 billion, reflecting a 7.9% increase year-over-year, while earnings per share are estimated at $4.25, indicating a 12.4% year-over-year growth [3] - The company has a trailing four-quarter earnings surprise average of 0.8%, although it missed the Zacks Consensus Estimate by 1.7% in the last quarter [4] Growth Strategies and Market Position - Costco's strategic investments, customer-centric approach, and focus on membership growth have contributed to its resilience as a consumer defensive stock [2] - The company’s competitive pricing and bulk purchasing power enable it to maintain low prices, which is expected to drive comparable sales growth of 4.7% in the third quarter [8] - High membership renewal rates, exceeding 90%, provide a stable revenue source, with membership fees anticipated to increase by 9.6% during the quarter [9] E-commerce and Expansion - Costco's adaptability in product offerings and continuous expansion into new markets, including e-commerce growth projected at 21%, positions it well for future success [10] Valuation and Market Comparison - Costco's forward 12-month price-to-earnings (P/E) ratio is 52.28, significantly higher than the industry average of 33.09 and the S&P 500's 21.36, indicating a premium valuation [13] - The stock has outperformed competitors, with a 24% increase in price over the past year, compared to declines in competitors like Dollar General and Target [12] Investment Considerations - Despite its premium valuation, Costco's strong financial health and strategic initiatives suggest potential for further upside, making it a compelling choice for growth-oriented investors [18]

Group 1: Market Overview - Trump's trade policies have caused volatility in broader equities, leading to investor concerns about future market conditions [1] - Despite short-term uncertainties, the stock market is expected to provide competitive returns over the long term [1] Group 2: Coca-Cola - Coca-Cola has outperformed the market this year, benefiting from its position in the consumer staples industry, which is perceived as a safe haven during economic downturns [4] - The company's forward price-to-earnings (P/E) ratio is 24.2, which is reasonable compared to the industry average of 22.2 [4] - Coca-Cola's extensive global presence and local manufacturing reduce the impact of tariffs, making it resilient to trade policy changes [5] - The brand's strong recognition and adaptability to changing consumer demands provide a competitive advantage [6][7] - Coca-Cola has a remarkable dividend track record, having increased payouts for 63 consecutive years, indicating robust underlying operations [8] Group 3: Costco - Costco's stock appears expensive with a forward P/E of 56.7, which is significantly above the average for consumer staples [9] - The company's membership model fosters customer loyalty and encourages repeat visits, enhancing its competitive position [10] - Costco has substantial growth opportunities, particularly in international markets, with 69% of its warehouses located in the U.S. [11] - The company holds a 1.5% share of the U.S. e-commerce market, with e-commerce sales growing faster, providing a long-term growth tailwind [12] - Although tariffs may impact margins, Costco's strong brand and global expansion strategy are expected to sustain its appeal and performance in the long run [13]

BJ’s Wholesale Club Holdings, Inc. (BJ) reported mixed results for the first quarter of fiscal 2025. While revenues came in below the Zacks Consensus Estimate, earnings exceeded expectations. Both figures improved year over year, supported by modest growth in comparable club sales.BJ’s First-Quarter InsightsBJ’s Wholesale Club reported adjusted earnings of $1.14 per share, which came ahead of the Zacks Consensus Estimate of 91 cents and increased from 85 cents reported in the year-ago period. (See the Zacks ...

BJ's Wholesale Club Holdings, Inc. (BJ) is likely to register an increase in the top line when it reports first-quarter fiscal 2025 results on May 22, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $5.18 billion, which indicates an increase of 5.2% from the prior-year reported figure.The bottom line of this operator of membership warehouse clubs is expected to rise year over year. The Zacks Consensus Estimate for first-quarter earnings per share, which has been stable at 91 ...

Wall Street analysts forecast that BJ's Wholesale Club (BJ) will report quarterly earnings of $0.91 per share in its upcoming release, pointing to a year-over-year increase of 7.1%. It is anticipated that revenues will amount to $5.18 billion, exhibiting an increase of 5.2% compared to the year-ago quarter.The current level reflects an upward revision of 0.1% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reapprais ...