I’m not a financial analyst, as is probably very evident, but I do like to share the earnings reports for Costco, especially when they are so good. The results for Costco’s first quarter of their fiscal year 2015, are quite good and demonstrate how they are far outpacing their competition. And I think the results were better than Wall Street was expecting too, which is always a good thing.
For FY2015 Q1 Costco reported a net income per share of $1.12 or $496 million, which bested the $1.09 per share that was widely expected on Wall Street. That represents a rise in profits of 17 per cent from $0.96 per share or $425 million a year earlier.
New memberships are up with Costco making $582 million from those fees in Q1, which is up from $549 million a year ago during the same period. Falling gas prices have also had a big impact on Costco’s earnings. Gas prices have fallen to $0.61 per gallon over this time last year, according to AAA. Costco might really gain by dropping gas prices because that could mean that members, who have just paid less at the pump, are more likely to buy more in their stores.
The good news is that Costco continues to do well, even when other retailers have been reporting slumping sales and weak numbers. Costco should be able to continue to post such good results for the rest of their fiscal year 2015 since all indicators point to a growing retail market in the US again. Same store sales at Costco (stores open a year or more) increased a very, very healthy 7 percent, when excluding changes in gasoline prices and foreign-currency exchange rates. And that is far and away a much better result than what either Wal-Mart or Target have reported most recently. For the most recent quarter, Wal-Mart reported a 0.5 percent increase in U.S. comparable-store sales, while Target posted a gain of 1.2 percent.
Woot-woot for Costco!
For more information:
- CBS News: Falling gas prices give Costco’s profits a boost
- Bloomberg: Costco Profit Beats Estimates After Same-Store Sales Bounce