Costco [$COST] posted an adjusted $2.29 a share on revenue that rose 17% YOY to $43.2 billion. The Street was looking for an EPS of $2.09 on revenue of $43.1 billion. Same-store sales rose 15.4% overall, or 17.1% excluding the impact of gas prices & foreign exchange. Consensus called for just over a 15% rise. U.S. comparable sales increased 17% on an adjusted basis, while E-commerce sales followed suit more than 86% in the period.
While investors probably hoped for a stronger top-line number, especially given how well the retailer has done in recent quarters, due to the pandy, overall it was another resilient quarter. While EPS moderated from last quarter’s high levels, it was better than expected, and comparable sales eclipsed analyst estimates. So why the standstill? Could it be investors are too occupied with the Walmart+ unveiling [$WMT], the Ack-SPAC [$PSTH], and incessant IPO’s? [Bill Ackman’s Ack-SPAC is the Wall St Rage]
Foot traffic at Costco turned positive in October, rising 4% YOY, while the first half of November was also up bigly, although a rise in virus infections means a trend reversal could ensue by the end of December. The stock has jumped more than 26% in 2020, as its status as an essential retailer allowed it to stay open throughout the pandy. That has led to huge double-digit same-store gains in recent months, although hopes were to high for the November number.
High expectations also pushed Costco over the edge after its previous earnings call in September. Although the results were strong, shares have since moved higher, hitting fresh highs of $386.88 in recent weeks. The company also declared a special dividend in November.