Costco Wholesale (COST) stock is struggling Friday after the membership warehouse's appearance on the earnings calendar. While COST beat revenue and earnings expectations for its fiscal 2024 third quarter, the company kept membership fees unchanged at current rates.
In the 12 weeks ended May 12, Costco's revenue increased 9.1% year-over-year to $58.5 billion. Comparable store sales were up 6.5% when excluding the impacts from changes in gasoline prices and foreign exchange, while e-commerce sales surged 21% on strong demand for gold bars and silver coins.
COST also said its earnings per share (EPS) jumped 29% from the year-ago period to $3.78.
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The top- and bottom-line results cruised past analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $58.1 billion and earnings of $3.70 per share.
When asked on the conference call about a possible membership fee increase, Costco Chief Financial Officer Gary Millerchip said that even though the company is well beyond the typical five years for an increase, it is still evaluating "high inflation and the risk and concern around recession" to determine when the right time will be to raise fees.
Costco also eased concerns about raising the price of its $1.50 hot dogs. Although the company cut off access to non-members earlier this year, Millerchip confirmed in the earnings call that the "price is safe."
Is Costco stock a buy, sell or hold?
Overall, analysts remain generally upbeat toward the retail giant. According to S&P Global Market Intelligence, the consensus analyst target price for COST stock is $805.82, representing implied upside of about 1% to current levels. Meanwhile, the consensus recommendation is a Buy.
Financial services firm UBS is one of the most bullish firms on Costco stock with a Buy rating and a $940 price target.
"COST posted yet another quarterly result which indicated continued significant market share gains and broad-based strength across the business, with its worldwide traffic growing 6% year-over-year,discretionary business outperforming, and its operating margin reaching the highest quarterly level in nearly 24 years," UBS Global Research Michael Lasser said in a report. "We think COST will likely have even more levers to increase its dominance in the retail industry in the coming years."
The $940 price target represents implied upside of about 18% to current levels.
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FAQs
Costco Wholesale topped earnings expectations, but the stock fell following the company's rare revenue miss. The company's fiscal second-quarter revenue of $58.4 billion missed analyst projections for $59.1 billion.
Why is Costco stock down after earnings beat expectations? ›
Costco Wholesale's revenue came in short of expectations in its latest quarter, sending the stock lower in after-hours trading Thursday. The wholesale retailer's fiscal-third-quarter revenue rose 9.1% year-over-year to $57.4 billion, narrowly missing calls for $58 billion.
Why has Costco stock dropped? ›
Costco shares declined 4% on Thursday despite the company announcing it would be raising its annual membership fees later this year. Members will be paying 8% more in September, but it's been seven years since its last increase. Investors wanted more.
What are analysts saying about Costco stock? ›
The highest analyst price target is $1,061.00 ,the lowest forecast is $800.00. The average price target represents 6.20% Increase from the current price of $876.68. Costco's analyst rating consensus is a Strong Buy. This is based on the ratings of 22 Wall Streets Analysts.
Why is Kirkland stock down? ›
Kirkland's shares fall premarket after company swings to Q1 loss and all metrics fall short of estimates.
Why would a stock go down after beating earnings? ›
When a company releases an earnings report, a fundamental reaction is often the most common. As such, good earnings that miss expectations can result in a downgrade of value. If a firm issues an earnings report that does not meet Street expectations, the stock's price will usually drop.
Who owns the most stock in Costco? ›
Costco Stock Ownership FAQ
Who owns Costco? Costco (NASDAQ: COST) is owned by 68.55% institutional shareholders, 0.83% Costco insiders, and 30.62% retail investors. Vanguard Group Inc is the largest individual Costco shareholder, owning 41.37M shares representing 9.33% of the company.
What is the future for Costco stock? ›
Stock Price Forecast
The 27 analysts with 12-month price forecasts for Costco stock have an average target of 823.96, with a low estimate of 585 and a high estimate of 975. The average target predicts a decrease of -9.24% from the current stock price of 907.87.
What is the highest Costco stock has ever been? ›
Costco - 38 Year Stock Price History | COST
- The all-time high Costco stock closing price was 908.90 on August 27, 2024.
- The Costco 52-week high stock price is 918.93, which is 2.8% above the current share price.
- The Costco 52-week low stock price is.
- The average Costco stock price for the last 52 weeks is 722.28.
Very good business, but the valuation is very high (~50x earnings). Would recommend investors wait before investing. Membership business very strong with excellent product offering.
Shares of membership-only discount retailer Costco (NASDAQ:COST) fell 7.7% in the afternoon session after the company reported fourth-quarter results with revenue falling short of analysts' expectations. Free cash flow also underwhelmed during the quarter with the company recording a significant amount of cash burn.
Will Kirkland stock go back up? ›
KIRK Stock 12 Month Forecast
Based on 2 Wall Street analysts offering 12 month price targets for Kirkland's in the last 3 months. The average price target is $7.00 with a high forecast of $7.00 and a low forecast of $7.00. The average price target represents a 322.96% change from the last price of $1.66.
What to expect from Costco earnings? ›
Costco Wholesale Corporation Common Stock is expected* to report earnings on 09/26/2024 after market close. The report will be for the fiscal Quarter ending Aug 2024. According to Zacks Investment Research, based on 14 analysts' forecasts, the consensus EPS forecast for the quarter is $5.04.
Why is Costco dividend so low? ›
By keeping its yield low, it can focus on growth opportunities without having to worry about high dividend payments, and then reward long-term investors later on when those growth initiatives pay off. Costco is a great stock to own for more than just its dividend.
