Costco (COST) Posts In-Line Q1; Shares Lower Into Call On Weaker EBIT
Tweet
Share
E-mailGet Alerts COST Hot Sheet
Join SI Premium – FREE
Costco Wholesale (NASDAQ: COST) announced today its operating results for the first quarter of fiscal 2012, ended November 20, 2011. Shares of COST are trading down 2.25 percent in the pre-market hours of trading this morning following the quarterly results.
Net sales increased 13 percent to $21.18 billion year over year and slightly topped the Street’s consensus of $21.46 billion. Membership fees accounted for 2.1 percent of total revenues and rose by 7.5 percent year over year.
Comparable store sales were up 10 percent in the U.S. and were up 11 percent internationally.
Merchandising costs rose 13 percent year over year to $18.93 billion while selling general and administrative expenses rose 10.5 percent to $2.15 billion.
Net income rose 2.5 percent year over year to $320 million, or $.73 per diluted share. Management also noted the quarterly results were negatively affected by charges totaling $41 million or $0.07 per share to earnings. The Street was forecasting earnings of $0.80 per diluted share for the quarter.
The company ended the quarter with $4.319 billion in cash and cash equivalents, up 7.7 percent from the end of August 2011.
Costco currently operates 596 warehouses, including 433 in the United States and Puerto Rico, 82 in Canada, 32 in Mexico, 22 in the United Kingdom, nine in Japan, eight in Taiwan, seven in Korea and three in Australia
Goldman Sachs believes the weaker EBIT may pressure shares going into the conference call this morning at 11:00 am ET. An analyst at Goldman comments, "As previewed, COST's results once again demonstrated the consistency of the model: powerful top-line growth with limited flow through. While the membership fee increase announced in October will only start to impact existing members and EPS in the coming quarters, the recent results continue to suggest the ultimate benefit may be muted."
Goldman believes some of the key topics during the conference call will include; what were the components of the GM decline? What drove the significant jump in interest income? How did the settlement of an income tax audit of COST’s 50% owned Mexico JV impact individual line-items?
Deutsche Bank states Mr. Galanti's color on core margins during the conference call will be the key focus for them. The firm notes other key questions during the conference call will include; "Can you discuss inflationary pressures and the current state of pricing in key categories? How do you feel about Holiday trends post Black Friday? Within both GPM and SG&A, how did the core margin rate perform in Q1?"
Net sales increased 13 percent to $21.18 billion year over year and slightly topped the Street’s consensus of $21.46 billion. Membership fees accounted for 2.1 percent of total revenues and rose by 7.5 percent year over year.
Comparable store sales were up 10 percent in the U.S. and were up 11 percent internationally.
Merchandising costs rose 13 percent year over year to $18.93 billion while selling general and administrative expenses rose 10.5 percent to $2.15 billion.
Net income rose 2.5 percent year over year to $320 million, or $.73 per diluted share. Management also noted the quarterly results were negatively affected by charges totaling $41 million or $0.07 per share to earnings. The Street was forecasting earnings of $0.80 per diluted share for the quarter.
The company ended the quarter with $4.319 billion in cash and cash equivalents, up 7.7 percent from the end of August 2011.
Costco currently operates 596 warehouses, including 433 in the United States and Puerto Rico, 82 in Canada, 32 in Mexico, 22 in the United Kingdom, nine in Japan, eight in Taiwan, seven in Korea and three in Australia
Goldman Sachs believes the weaker EBIT may pressure shares going into the conference call this morning at 11:00 am ET. An analyst at Goldman comments, "As previewed, COST's results once again demonstrated the consistency of the model: powerful top-line growth with limited flow through. While the membership fee increase announced in October will only start to impact existing members and EPS in the coming quarters, the recent results continue to suggest the ultimate benefit may be muted."
Goldman believes some of the key topics during the conference call will include; what were the components of the GM decline? What drove the significant jump in interest income? How did the settlement of an income tax audit of COST’s 50% owned Mexico JV impact individual line-items?
Deutsche Bank states Mr. Galanti's color on core margins during the conference call will be the key focus for them. The firm notes other key questions during the conference call will include; "Can you discuss inflationary pressures and the current state of pricing in key categories? How do you feel about Holiday trends post Black Friday? Within both GPM and SG&A, how did the core margin rate perform in Q1?"
Are you missing key trading opportunities? Upgrade to StreetInsider Premium and get a step ahead of the market - FREE TRIAL!
Create E-mail Alert Related Categories
EarningsRelated Entities
Deutsche Bank, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
