Costco reported a fiscal Q1 beat with revenue of $67.31 billion (up 8%) and adjusted EPS of $4.50 (up 11%), topping LSEG consensus of $4.27, driven by a 20.5% surge in digital revenue (site traffic +24%, AOV +13%, app traffic +48%) and a record Black Friday $250 million in non‑food online orders. Same‑store sales rose 6.4% on an adjusted basis (U.S. +5.9%, Canada +9%), membership‑fee revenue jumped 14% to $1.33 billion following a price increase, paid households rose to 81.4 million with higher‑cost executive members at 39.7 million (accounting for roughly 74% of sales), while renewal rates remain strong overall but weaker among younger digital signups; the chain opened eight stores in the quarter and trimmed fiscal‑year new‑store guidance to 28 due to delays in Spain. Despite broad operational momentum across e‑commerce, fresh and non‑food categories, the stock is down about 5% YTD (≈11% over 12 months) and trades at a rich forward P/E of ~43.5x, implying the shares may remain range‑bound until growth or margin drivers justify the valuation.
Costco reported fiscal Q1 revenue of $67.31 billion, up 8%, and adjusted EPS of $4.50, up 11%, beating LSEG consensus of $4.27 on $67.14 billion; digital revenue surged 20.5% with site traffic +24%, average order value +13%, app traffic +48%, and a record Black Friday $250 million in non-food online orders, indicating meaningful e-commerce acceleration. Same-store sales rose 6.4% on an adjusted basis (U.S. +5.9%, Canada +9%, other international +6.8%) with average transactions up 3.2% and traffic gains, while meat and fresh-food categories and non-food verticals (gold/jewelry, health and beauty) showed strength. Membership economics remain a key margin driver: membership-fee revenue jumped 14% to $1.33 billion after the September 2024 price increase, paid households rose to 81.4 million, and higher-cost executive memberships grew to 39.7 million (49% of members, ~74.3% of sales), though renewal rates are weaker among younger digital signups. The company opened eight stores (total 921) but trimmed fiscal-year new-store guidance to 28 due to Spain delays while maintaining a long-term target of 30+ openings. Despite operational momentum, the shares are down ~5% YTD (~11% over 12 months) and trade at a forward P/E of ~43.5x (above historical trailing P/E of 30–40x), suggesting the stock may remain range-bound until sustained margin expansion, membership-renewal stabilization among younger cohorts, or acceleration in store growth justifies a re-rating. Market sentiment is mildly positive but cautious, so near-term upside appears tied to execution on digital engagement and renewals rather than one-time lift from past fee increases.
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mildly positive
Sentiment Score
0.28
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