Should You Add To Your COSTCO Investment At These Levels?

TL;DR

Costco stock is down 15% year to date after Q1 earnings were reported, missing on revenue but showing solid growth in membership fees.

Transcript

Costco stock is down 15 percent a year to date that is after reporting q1 earnings after the Bell today we will get into those earnings we'll take a look at the Rev of the new estimates for the upcoming quarters as well look at this from the valuation perspective and then you gotta look at this from a technical perspective since for basically 40 ye... Read More

Key Insights

• 🧑‍🤝‍🧑 Costco's stock is down 15% year to date, but has held up relatively well compared to other investments.
• 😘 The company's business model, focused on predictable membership fees and low-margin merchandise sales, contributes to consistent earnings growth.
• 🥳 Costco's valuation is relatively high, with a price-to-earnings ratio of over 36.
• 🛀 The company's technical chart shows a consistent trading pattern over the last 40 years.
• 🇨🇷 Costco's operating expenses, including merchandising costs and administrative costs, remain low.
• 🌍 U.S. stores are performing better than international markets, with Canada experiencing a 2.4% increase in sales.
• 👨‍💼 Costco's e-commerce business has not been a priority for the company and experienced a decline in sales.

Questions & Answers

Q: How did Costco's Q1 earnings perform compared to expectations?

Costco's Q1 earnings missed expectations, with revenue growth at 8.1% year over year and earnings coming in below estimates.

Q: What contributed to Costco's high-margin revenue?

Costco's membership fees crossed the $1 billion mark, contributing to high-margin revenue for the company.

Q: How are Costco's U.S. stores performing compared to international markets?

Costco's U.S. stores are performing well, with a 9.3% increase in sales. However, there is weakness in international markets, including Canada, Mexico, and the United Kingdom.

Q: Is Costco's e-commerce business performing well?

Costco's e-commerce business slipped year over year, experiencing a decline of about 3.7%. The company has not placed much emphasis on e-commerce compared to competitors.

Summary & Key Takeaways

• Costco's Q1 earnings missed expectations on both revenue and earnings, with revenue growth at 8.1% year over year.

• Membership fees crossed the $1 billion mark, contributing to high-margin revenue for the company.

• The company's U.S. stores are performing well, but there is weakness in international markets and a decline in e-commerce business.