DIpil Das
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Source: Company reports/Coresight Research[/caption]
3Q19 Results
Costco Wholesale reported 3Q19 revenues of $34.74 billion, up 7.4% year over year and slightly above the $34.71 billion consensus estimate.
Net income was $906 million, an increase of 20.8% from the year-ago quarter’s $750 million.
The gross margin was 10.9%, a decrease of 7 basis points year over year.
Store traffic increased by 3.7% worldwide and 3.4% in the US.
The operating margin was 3.2%, a decrease of 7 basis points year over year.
Details from the Quarter
Source: Company reports/Coresight Research[/caption]
3Q19 Results
Costco Wholesale reported 3Q19 revenues of $34.74 billion, up 7.4% year over year and slightly above the $34.71 billion consensus estimate.
Net income was $906 million, an increase of 20.8% from the year-ago quarter’s $750 million.
The gross margin was 10.9%, a decrease of 7 basis points year over year.
Store traffic increased by 3.7% worldwide and 3.4% in the US.
The operating margin was 3.2%, a decrease of 7 basis points year over year.
Details from the Quarter
- Costco’s net sales came in at $33.96 billion, a 7.4% increase over its $31.62 billion in the year-ago quarter.
- Membership fee income was $776 million, or 2.29% of sales, up 5.3% year over year.
- As of the end of the third quarter, membership renewal rates in the US and Canada stood at 90.7% and worldwide at 88.3%, the same as the end of 2Q19.
- The company is working on the strategic initiatives listed below:
- Investments in e-commerce and online merchandise.
- A focus on letting consumers buy online and pick up from the store. The company is in the process of rolling out an additional 100 locations over the next four to five months before the September-through-December holiday season.
- Improving the Costco app by adding features such as pharmacy orders and pickup notifications, easier shopping on member savings events, photo center and various push notifications.
- At the end of the quarter, the company’s members numbered 53.1 million and total cardholders reached 97.2 million.
- During the quarter, Costco opened three new warehouses: one each in the US, South Korea and Australia.
- The company’s e-commerce sales increased on a comp basis to 19.5%. Top growth categories in the quarter were electronics, health and beauty aids, furniture, small appliances, automotive and optical.
- Costco is looking at alternative sourcing destinations as the tariff threat looms.