Core Insights - Costco Wholesale Corp. reported strong earnings in its fourth quarter, achieving double-digit earnings growth and market share gains despite macroeconomic challenges [1] - Analysts from Telsey Advisory Group maintained an Outperform rating with a price target of $1,100 following the company's better-than-expected fiscal fourth-quarter results [1] Financial Performance - Adjusted EPS reached $5.87, exceeding both the analysts' estimate of $5.84 and the FactSet consensus of $5.80, driven by an 8.1% sales growth to $86.2 billion and a six-basis-point increase in operating margin to 3.9% [2] - Comparable store sales grew robustly by 6.4%, with strong performance noted across the U.S., Canada, and international markets [3] Membership Trends - Membership fee income increased by 14% to $1.7 billion, although renewal rates softened by 40 basis points to 89.8% globally and 92.3% in the U.S. and Canada, attributed to lower online renewals and the lapping of a digital promotion [4] Future Outlook - The brokerage anticipates Costco will continue to gain market share, supported by over 30 planned club openings in fiscal year 2026, strong Kirkland Signature product sales, competitive pricing, and digital enhancements [5] - Analysts raised the fiscal 2026 EPS forecast to $20.12 from $20.09 and projected fiscal 2027 EPS at $22.14, citing margin leverage and steady comparable store sales growth [6] Additional Analyst Insights - Bank of America reiterated a Buy rating with a price target of $1,095 based on a 52 times multiple of its fiscal 2027 EPS estimate of $21 [6] - Bank of America also projects fiscal 2026 EPS at $19.70, supported by fee increases and planned warehouse openings, with long-term EPS expected to reach $22.15 by fiscal year 2028 [7]

Group 1 - Costco reported $86.16 billion in revenue for the quarter ended August 2025, reflecting a year-over-year increase of 8.1% [1] - The EPS for the same period was $5.87, compared to $5.15 a year ago, indicating a positive growth in earnings [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $86.18 billion, resulting in a surprise of -0.03% [1] Group 2 - Comparable sales for the total company were 5.7%, slightly above the estimated 5.6% by analysts [4] - Changes in comparable sales excluding foreign-currency and gasoline prices were 6.4%, compared to the estimated 6.7% [4] - The total number of warehouses worldwide reached 914, slightly above the estimated 913 [4] Group 3 - The stock of Costco has returned -0.5% over the past month, while the Zacks S&P 500 composite increased by 2.7% [3] - Costco currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Net sales for Q4 were $84.43 billion, an increase of 8% from $78.18 billion in the same quarter last year [12] - Net income for Q4 was $2.61 billion, or $5.87 per diluted share, up 11% from $2.35 billion, or $5.29 per diluted share last year [12] - Membership fee income increased by $212 million or 14% year-over-year, reaching $1.72 billion [14] - Gross margin for Q4 was 11.13%, up 13 basis points year-over-year [17] - SG&A rate increased to 9.21%, up 17 basis points from 9.04% last year [18] Business Line Data and Key Metrics Changes - E-commerce sales exceeded $19.6 billion, increasing over 15% [7] - Comparable sales were up 5.7%, or 6.4% adjusted for gas deflation and foreign exchange [12] - E-commerce comparable sales were up 13.6%, or 13.5% adjusted for foreign exchange [13] - Fresh sales were up high single digits, led by double-digit growth in meat [22] - Non-foods had comparable sales in the high single digits, with strong performance in gold and jewelry, gift cards, and consumer electronics [23] Market Data and Key Metrics Changes - The company opened 10 new warehouses in Q4, bringing the total to 914 worldwide [5] - Plans to open another 35 warehouses in fiscal year 2026, including five relocations [5] - Total paid members reached 81 million, up 6.3% year-over-year, with 38.7 million paid executive memberships, up 9.3% [15] Company Strategy and Development Direction - The company is focusing on expanding both domestically and internationally, with significant opportunities identified in existing markets [5] - Continued investment in technology and digital enhancements to improve member experience and drive e-commerce growth [9][28] - Emphasis on sourcing more Kirkland Signature products locally to reduce costs and emissions [8][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growing market share despite macroeconomic uncertainties [11] - The company is adapting to changes in membership dynamics, particularly with younger members joining through online sign-ups [16][41] - Management is optimistic about the upcoming holiday season, with a strong inventory position and new product offerings [27] Other Important Information - Capital expenditure for Q4 was approximately $1.97 billion, with a total of under $5.5 billion for the full year [20] - The company is focusing on improving member value through enhanced benefits and services, including extended operating hours and new membership perks [8][11] Q&A Session Summary Question: Awareness of extended member hours and potential for comp lift - Management believes they have effectively communicated the extended hours to members, with a 1% comp lift observed [32][33] Question: Expected decline in membership renewal rates - Management anticipates a continued decline in renewal rates due to a higher number of online sign-ups, but sees overall membership engagement as strong [38][41] Question: Insights on core margins and price increases - Core margins improved by 29 basis points year-over-year, with strong performance across all main categories [45][47] Question: Sustainability of membership fee income growth - Management remains optimistic about continued growth in membership income, driven by new warehouse openings and younger member engagement [56][57] Question: E-commerce and grocery demand in light of competition - Management noted strong growth in Instacart-driven traffic and is aware of increased competition, but remains confident in their offerings [65][66]

Financial Data and Key Metrics Changes - Net sales for Q4 were $84.43 billion, an increase of 8% from $78.18 billion in the same quarter last year [12] - Net income for Q4 was $2.61 billion, or $5.87 per diluted share, up 11% from $2.35 billion, or $5.29 per diluted share in the prior year [12] - Membership fee income increased by $212 million or 14% year over year, reaching $1.72 billion [14] - Gross margin for Q4 was 11.13%, up 13 basis points year over year [17] - SG&A rate increased to 9.21%, up 17 basis points from 9.04% last year [18] Business Line Data and Key Metrics Changes - E-commerce sales exceeded $19.6 billion, increasing over 15% year over year [7] - Comparable sales were up 5.7%, or 6.4% adjusted for gas deflation and foreign exchange [12] - E-commerce comparable sales were up 13.6%, or 13.5% adjusted for foreign exchange [13] - Fresh sales were up high single digits, with double-digit growth in meat [22] - Non-foods had comparable sales in the high single digits, with strong performance in gold and jewelry, gift cards, and consumer electronics [23] Market Data and Key Metrics Changes - The company opened 10 new warehouses in Q4, bringing the total to 914 worldwide [5] - Plans to open another 35 warehouses in fiscal year 2026, including five relocations [5] - Total paid members reached 81 million, up 6.3% year over year, with 38.7 million paid executive memberships, up 9.3% [15] Company Strategy and Development Direction - The company aims to grow market share by delivering high-quality items at the best value [11] - Continued focus on expanding Kirkland Signature product sourcing to lower costs and reduce emissions [8] - Investments in technology and enhanced checkout processes to improve member experience [9] - Emphasis on digital strategy to enhance member engagement and e-commerce capabilities [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growth despite macroeconomic uncertainties [11] - The company is adapting to changes in membership dynamics, particularly with younger members [41] - Management noted the importance of improving renewal rates for online sign-ups [42] Other Important Information - Capital expenditure in Q4 was approximately $1.97 billion, with a total of under $5.5 billion for the full year [20] - The company is focusing on mitigating tariff impacts and increasing domestic sourcing [26] - Inflation remained in the low to mid-single digit range, with varying impacts across categories [25] Q&A Session Summary Question: Awareness of extended member hours and potential comp lift - Management communicated effectively about extended hours, resulting in a 1% comp lift, with ongoing efforts to inform members [32][33][34] Question: Expected decline in membership renewal rates - Management acknowledged a potential decline in renewal rates due to increased online sign-ups but emphasized overall membership growth and engagement [38][39][41] Question: Insights on core margins and price increases - Core margins improved by 29 basis points, with effective management of tariffs and supply chain efficiencies contributing to this outcome [45][46][47] Question: Sustainability of membership fee income growth - Management remains optimistic about continued membership growth driven by new warehouse openings and younger member engagement [55][56] Question: E-commerce and grocery demand in light of competition - Management noted strong growth in Instacart-driven traffic and remains aware of competition, focusing on delivering desired products to consumers [65][66][67] Question: Future capital expenditure plans - Management indicated that capital expenditure would likely grow in 2026, focusing on warehouse openings, remodels, and technology investments [74][76]

Sales Performance - Net sales reached $84.4 billion, representing an 8.0% growth[4] - Comparable sales increased by 5.7%[4] - Adjusted comparable sales, excluding gasoline price and foreign exchange impacts, grew by 6.4%[4] - E-commerce comparable sales saw a 13.6% increase, with an adjusted increase of 13.5% excluding foreign exchange impacts[4] - US comparable sales increased by 5.1%, while adjusted US comparable sales grew by 6.0%[8] Financial Highlights - Net income was $2.61 billion, and diluted EPS was $5.87, representing a 10.9% and 11.0% growth respectively[9] - Gross margin increased by 13 bps compared to Q4 FY'24, and 3 bps excluding gas impact[9] - SG&A decreased by 17 bps compared to Q4 FY'24, and 9 bps excluding gas impact[9] Membership Metrics - Membership income grew by 14.0%, or 13.6% excluding foreign exchange impacts[12] - The worldwide membership renewal rate was 89.8%, with a US/CN renewal rate of 92.3%[12] - Paid memberships reached 81.0 million, a 6.3% increase[15] - Total cardholders amounted to 145.2 million, a 6.1% increase[15] Digital Performance - E-commerce comparable sales increased by 13.6%, with an adjusted increase of 13.5%[17] - E-commerce site traffic increased by 27%[20] Warehouse Expansion - The company ended FY'25 with a total of 914 warehouses, including 629 in the US, 110 in Canada, and 175 in other international locations[23] - The company plans to expand to 944 warehouses in FY'26[23]

Core Insights - The opening of the Sam's Club in Yangzhou is set for mid-November, one month earlier than expected, following a light-up ceremony that showcased a blend of technology and visual effects [1][3][5] Group 1: Store Details - The Yangzhou Sam's Club, developed by Yiyang Investment Group, features a total construction area of 98,000 square meters, including a 20,000 square meter warehouse-style supermarket, a boutique hotel, and an underground parking lot with 1,020 spaces [5][7] - The store's design incorporates a milk-white color scheme and streamlined architecture, complementing the scenic views of Moon Lake [5] Group 2: Economic Impact - The establishment of the Sam's Club is expected to enhance the commercial value and living quality of the Moon Lake business district, catering to the city's high-end and diversified consumer demands [7] - The Moon Lake area is recognized as a national-level night-time cultural and tourism consumption hub, featuring the largest convention center in the city and several high-end commercial complexes and hotels [7] Group 3: Service Enhancements - On the day of the light-up event, Sam's Club announced the expansion of its "Express Delivery" service to Jiangdu District by the end of September, allowing members to receive orders within an hour through the Sam's Club app [7]

Core Insights - The company reported net sales of $21.56 billion for the month of August, representing an increase of 8.7% compared to $19.83 billion in the same month last year [4] - Comparable sales for the month were as follows: U.S. at 6.1%, Canada at 6.8%, Other International at 6.7%, total company at 6.3%, and e-commerce at 18.4% [4] - When excluding impacts from changes in gasoline prices and foreign exchange, comparable sales were: U.S. at 6.7%, Canada at 9.4%, Other International at 5.3%, total company at 6.9%, and e-commerce at 18.3% [4]

Core Viewpoint - The Sam's Club store in Tongzhou, Beijing, has officially signed a contract and is expected to open in 2027 [1] Group 1: Project Details - The investment partner for the Sam's Club Tongzhou project is Beijing Tongzhou Investment Development Co., Ltd. [1] - The project is located in the Fuhua Village group of Songzhuang Town, Tongzhou District [1] - The total planned land area for the project is approximately 40,600 square meters, with a total construction area of about 55,600 square meters, which will include commercial facilities and supporting infrastructure [1] - The project has already obtained the real estate property certificate [1]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Costco (COST), and suggests that while the average brokerage recommendation (ABR) indicates a favorable outlook, investors should exercise caution and consider additional analysis tools like the Zacks Rank for better investment decisions [1][5][10]. Brokerage Recommendations - Costco has an average brokerage recommendation (ABR) of 1.95, which is between Strong Buy and Buy, based on recommendations from 33 brokerage firms [2]. - Out of the 33 recommendations, 15 are Strong Buy (45.5%) and 4 are Buy (12.1%) [2]. Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations have limited success in guiding investors towards stocks with the best price increase potential [5]. - Brokerage firms often exhibit a strong positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [6][10]. Zacks Rank as an Alternative - The Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, which have shown a strong correlation with near-term stock price movements [8][11]. - The Zacks Rank is distinct from the ABR, as it is a quantitative model based on earnings estimates rather than solely on brokerage recommendations [9]. Current Earnings Estimates for Costco - The Zacks Consensus Estimate for Costco's earnings for the current year remains unchanged at $17.97, indicating steady analyst views on the company's earnings prospects [13]. - The recent consensus estimate change, along with other factors, has resulted in a Zacks Rank of 3 (Hold) for Costco, suggesting a cautious approach despite the favorable ABR [14].

Core Insights - Hema has decided to close all its X membership stores, marking the end of its attempt to establish a membership-based retail model that aimed to compete with Costco [1][3] - The last remaining store, Shanghai Senlan, is set to cease operations on August 31, following the closure of other locations in Beijing, Suzhou, and Nanjing on July 31 [1][3] Company Overview - Hema X membership stores were launched as a membership-based retail concept, positioning itself as the first Chinese brand in the warehouse-style membership market, primarily competing with Costco and Sam's Club [3] - The first Hema X membership store opened in October 2020 in Shanghai [3] Business Adjustments - In February 2023, Hema announced the closure of several stores, including the Shanghai Gaoqing, Dazhong, and Donghongqiao locations, effective April 1, citing business adjustments [3] - Insiders indicated that the closures were part of Hema's proactive business strategy [3]