COSTCO WHOLESALE CORPORATION

(COST)
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Delayed Nasdaq  -  04:00 2022-06-24 pm EDT
484.37 USD   +1.97%
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06/24Evercore ISI Adjusts Costco Wholesale Price Target to $510 From $490, Maintains Outperform Rating
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Costco margins hit by rising freight and labor costs, shares slip

05/26/2022 | 07:56pm EDT
FILE PHOTO: A Costco Wholesale retail club is photographed in Austin, Texas, U.S.

(Reuters) - Costco Wholesale Corp reported a fall in gross margins on Thursday, hit by soaring freight and labor costs across the United States, sending shares of the membership-only retailer down 2% and overshadowing an otherwise upbeat quarterly report.

U.S. companies across the board have been struggling with higher costs due to supply chain disruptions, exacerbated by fresh COVID-19 lockdowns in China and the Russia-Ukraine war.

Costco said it was increasing prices in certain areas of food to combat inflation.

Retailers like Walmart Inc and Target Corp have warned of decades-high inflation hitting their profits, with customers refraining from buying non-essential and high-margin products.

Still, Costco managed to post quarterly profit and revenue that handily topped estimates as an average shopper at the warehouse club operator earns more than a typical Walmart and Target customer.

The company's efforts to keep gas prices several cents below the national average have also driven memberships and sales.

In contrast to Walmart, Costco said there has not been much of a trade down or trade out from branded products to its private label product, Kirkland Signature.

"We're not seeing trade down really. We're seeing a little bit of shift in where people are spending their money.. this year, it's more sales in tickets, restaurants, travel, tires and gas," Robert Nelson, senior vice president of finance and investor relations, said in a post-earnings call.

In the third quarter, Costco's gross margins dropped by 99 basis points.

Costco's total revenue rose 16% to $52.60 billion in the quarter ended May 8, compared with estimates of $51.71 billion, according to Refinitiv IBES data.

Excluding items, Costco earned $3.17 per share, topping estimates of $3.03.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Amy Caren Daniel)

By Ananya Mariam Rajesh


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
COSTCO WHOLESALE CORPORATION 1.97% 484.37 Delayed Quote.-14.68%
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All news about COSTCO WHOLESALE CORPORATION
03:22pSunVilla recalls 400K outdoor umbrellas sold at Costco for fire risk
AQ
06/24Evercore ISI Adjusts Costco Wholesale Price Target to $510 From $490, Maintains Outperf..
MT
06/24COSTCO WHOLESALE CORPORATION(NASDAQG : COST) dropped from Russell 1000 Value Index
CI
06/24COSTCO WHOLESALE CORPORATION(NASDAQG : COST) dropped from Russell 3000E Value Index
CI
06/24COSTCO WHOLESALE CORPORATION(NASDAQG : COST) dropped from Russell 3000 Value Index
CI
06/24COSTCO WHOLESALE CORPORATION(NASDAQG : COST) dropped from Russell Top 200 Value Index
CI
06/24COSTCO WHOLESALE CORPORATION(NASDAQG : COST) dropped from Russell 1000 Value-Defensive Ind..
CI
06/23INSIDER SELL : Costco Wholesale
MT
06/21Evercore ISI Adjusts Price Target for Costco Wholesale to $490 From $500, Maintains Out..
MT
06/21DocuSign Chief Executive Officer Dan Springer Steps Down as Board Chair Wilderotter App..
MT
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Financials (USD)
Sales 2022 225 B - -
Net income 2022 5 793 M - -
Net cash 2022 7 905 M - -
P/E ratio 2022 37,0x
Yield 2022 0,68%
Capitalization 215 B 215 B -
EV / Sales 2022 0,92x
EV / Sales 2023 0,83x
Nbr of Employees 288 000
Free-Float 99,8%
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Mean consensus BUY
Number of Analysts 33
Last Close Price 484,37 $
Average target price 557,00 $
Spread / Average Target 15,0%
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Managers and Directors
Walter Craig Jelinek Chief Executive Officer & Director
Roland M. Vachris President & Chief Operating Officer
Richard A. Galanti Chief Financial Officer, Director & Executive VP
Hamilton Evans James Independent Non-Executive Director
Paul G. Moulton Chief Information Officer & Executive VP
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