Post Earnings Coverage as Costco's Numbers Missed Expectations; Announced Membership Price Increase
ACCESS Newswire
Upcoming AWS Coverage on Burlington Stores Post-Earnings Results
LONDON, UK / ACCESSWIRE / March 17, 2017 / Active Wall St. announces its post-earnings coverage on Costco Wholesale Corp. (NASDAQ: COST). The Company reported its second quarter fiscal 2017 operating results on March 02, 2017. The Warehouse club retailer's Comparable Sales increased 3%. Register with us now for your free membership at:
One of Costco Wholesale's competitors within the Discount, Variety Stores space, Burlington Stores, Inc. (NYSE: BURL), reported on March 02, 2017, results for Q4 and fiscal year ended January 28, 2017. AWS will be initiating a research report on Burlington Stores in the coming days.
Today, AWS is promoting its earnings coverage on COST; touching on BURL. Get our free coverage by signing up to:
For the twelve weeks ended February 12, 2017, Costco's net sales increased 6% to $29.13 billion from $27.57 billion last year. The Company's net sales lagged behind analysts' consensus of $29.85 billion. On a reported basis, comparable sales (Comp) were up 3% for Q2 FY17 and excluding gas and FX, they still remained up 3%. For the reported quarter, the plus 3% reported comp was a combination of an average transaction increase of a little over 1%, and an average shopping frequency increase of 2%. The Company's net sales for H1 2017 grew 4%, to $56.60 billion from $54.19 billion last year.
For the four-week reporting month of February, ended February 26, 2017, the Company reported net sales of $8.92 billion, an increase of 8% from $8.28 billion during the similar four-week period last year.
For Q2 FY17, Costco reported net income of $515 million, or $1.17 per diluted share, compared to $546 million, or $1.24 per diluted share, in the year ago comparable period. The Company's earnings numbers came in below market estimates of $1.36 per share. Costco's net income for H1 2017 was $1.06 billion, or $2.41 per diluted share, compared to $1.03 billion, or $2.32 per diluted share, in H1 2016.
Membership Details
During Q2 FY17, Costco's membership fees totaled $636 million, up 5% on a y-o-y basis. The Company continued to enjoy strong renewal rates, coming in a little over 90% in the US and Canada, and 87.7% worldwide on a fully captured basis.
Costco' members at the end of Q2 FY17, primary Gold Star came in at 37.5 million, up from 12 weeks earlier at 37.1 million. Primary business totaled 7.4 million up from 7.3 million 12 weeks earlier. Business add-on members were 3.4 million at the end of the reported quarter, down from 3.5 million. Overall, the Company had 48.3 million total accounts compared to 47.9 million the earlier fiscal quarter.
At the end of Q2 FY17, Costco reported 88.1 million total card holders, up from 87.3 million 12 weeks earlier. As of Q2 end, the Company's paid Executive Memberships stood at 17.9 million which is an increase of about 200,000 from 12 weeks earlier, or about 17,000 additional per week. Executive members represented a little over one-third of its member base, and about two-thirds of our sales.
Costco announced that, effective June 01, 2017; it will increase annual membership fees by $5 for US and Canada Goldstar (individual), Business, and Business add-on members ("Primary" Members). With this increase, all US and Canada Goldstar, Business and Business add-on members will pay an annual fee of $60. Also effective June 01, annual fees for Executive Memberships in the US and Canada will increase from $110 to $120 (Primary membership of $60, plus the Executive upgrade of $60), and the maximum annual 2% reward associated with the Executive Membership will increase from $750 to $1,000. The fee increases will impact around 35 million members, roughly half of them Executive Members.
Store Update
Costco currently operates 728 warehouses, including 508 in the United States and Puerto Rico, 94 in Canada, 37 in Mexico, 28 in the United Kingdom, 25 in Japan, 13 in Korea, 13 in Taiwan, 8 in Australia, and 2 in Spain. Costco also operates electronic commerce web sites in the US, Canada, the United Kingdom, Mexico, Korea, and Taiwan.
In Q2 FY17, the Company opened four new locations. Those included Costco's 13th unit in each of Korea and Taiwan, as well as two new locations in Florida, in the Tampa area. For all of FY17, the Company has plans of 29 net new locations, so 17 additional openings during the third and fourth quarters of FY17 are planned. Of the 29 for the year, 14 in the US, 8 in Canada, and 1 each in Japan, Korea, Taiwan, Mexico, and Australia, as well as its first openings in France and Iceland, most likely in mid to late May.
Stock Performance
On Thursday, March 16, 2017, the stock closed the trading session at $167.06, slightly up 0.31% from its previous closing price of $166.54. A total volume of 2.73 million shares have exchanged hands, which was higher than the 3-month average volume of 2.33 million shares. Costco Wholesale's stock price advanced 4.84% in the last three months, 11.50% in the past six months, and 9.68% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 4.62%. The stock is trading at a PE ratio of 30.85 and has a dividend yield of 1.08%.
Active Wall Street:
Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
AWS has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
NO WARRANTY
AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.
CONTACT
For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
