Costco Wholesale CorporationNASDAQ
Yesterday, 11:44 AM| Yesterday, 11:44 AM | 4 Comments
Sun, Oct. 16, 9:49 AM
- "Value investing works like clockwork, but sometimes your clock has to be very slow," says Joel Greenblatt, asked in a Barron's interview about the recent underperformance of some of his funds. The man behind the classic "You Can Be A Stock Market Genius" also published a barely-read "The Big Secret For The Small Investor" five years ago, noting, among other things, that average investors tend to dump good strategies at precisely the wrong time.
- Favorite longs in his long/short portfolio now include Apple (NASDAQ:AAPL), with double-digit cash flow yields vs. the S&P 500 at less than half of that. "People worry that it’s effectively a hardware company that will crash and burn. But it’s also an ecosystem of products that play with one another and a brand people like."
- He owns not just Apple, he says, but a "bucket" of Apples - companies with gushing cash flow, huge returns on capital, and nice market niches. Qualcomm (NASDAQ:QCOM) and CVS fit the bill.
- On the short side is Salesforce.com (NYSE:CRM) at 218x pretax earnings and 7x sales. Even if optimistic earnings estimates prove true, it's still selling for 50x. Others include Costco (NASDAQ:COST) - a great retailer, but still a retailer - at 28x earnings, but not growing and also competing with Amazon. Another is Caterpillar (NYSE:CAT), which has fans thanks to its 3.5% yield, but doesn't earn enough to pay that dividend.
- Gotham funds: GENIX, GARIX, GONIX, GINDX
Wed, Oct. 12, 4:28 PM
Thu, Oct. 6, 3:34 PM
- Guggenheim digs into Costco's (COST -0.3%) rundown of September sales.
- "The flat U.S. “core” result might raise some eyebrows but the segment was up against a strong 7% year-ago gain, placing the two-year gain at a respectable 7%," writes analyst John Heinbockel.
- "As food deflation and the impact of the tobacco exit ebb over the next six months, we would expect the 'core' comp to rebound, the principal question being to what degree? 3-4% would be a reasonable target," he adds.
- Heinbockel thinks Costco's share price could slip a little bit further as the retailer faces more near-term data comparisons before reaching an inflection point in early 2017.
- Previously: Costco reports comp sales in September (Oct. 6)
Thu, Oct. 6, 12:11 AM| Thu, Oct. 6, 12:11 AM | 2 Comments
Fri, Sep. 30, 10:02 AM
- A fascinating exchange during Costco's (NASDAQ:COST) earnings call speaks volume on how major retailers view the Amazon threat.
- In response to a question from Cowen, CFO Richard Galanti said the company's doesn't believe that it's in the small group of retailers that are "Amazon proof" or "Internet proof."
- "We don’t buy that for a minute," noted Galanti on the view Costco hasn't lost a sale of two to the Seattle juggernaut. It's been suggesting before (outside of Costco) that the business model fully protects the warehouse operator from online poaching.
- Plotting around Amazon and focusing on Costco's strengths is part of management's strategy.
- "Our value proposition is best served for us when it’s in-store getting members to come in and buying when they can see everything there that we have," stated Galanti.
- Previously: Costco Wholesale beats by $0.04, misses on revenue (Sept. 29)
- Previously: Underlying comparable sales rise 3% at Costco (Sept. 29)
- Costco earnings call transcript
Thu, Sep. 29, 4:25 PM
- Comparable sales came in flat for Costco (NASDAQ:COST) in FQ4. If gas price deflation and F/X swings are backed out, comparable sales ended up +3% for the quarter.
- Merchandise costs as a percentage of revenue were up slightly.
- Costco ended its fiscal year with 715 warehouses. The Company says it plans to open nine more warehouses before the end of the calendar year.
- Previously: Costco Wholesale beats by $0.04, misses on revenue (Sept. 29)
- COST +1.09% AH to $149.10.
Thu, Sep. 29, 4:18 PM
Wed, Sep. 28, 5:35 PM
Thu, Sep. 22, 1:11 PM
- Deutsche Bank points to the outperformance of Costco (COST +0.6%) in relation to the broad retail sector.
- "Costco consistently produces traffic gains and solid softline & hardline category growth," writes analyst Paul Trussell.
- DB note: "Food deflation & tobacco exit headwinds likely continue into Spring, but overall compares begin to ease at year-end. Importantly, we see margin tailwinds, steady member growth, strong renewal rates, & fee increases (upcoming in U.S. & recently enact ed International), as downside protection to the P&E."
- Costco is up 7.7% over the last 52 weeks, compared to a 4.4% slide in the S&P Retail ETF
Thu, Sep. 15, 9:02 AM
- Retail sales fell in August on a month-over-month comparison. The drop wasn't a large surprise considering the onslaught of warnings from the retail sector on store traffic.
- 8 out of the 13 retail categories showed negative growth during the month, with the largest drops recorded in the building material/garden equipment/supplies dealers and miscellaneous store retailers categories. The broad weakness turned on its head the argument that money freed up from a lower level of auto sales would be funneled into other consumer purchases.
- Food services and drinking places showed a +0.9% M/M and +5.8% Y/Y increase in a somewhat surprising result considering the harsh read from Black Box Intelligence on August same-store sales in the restaurant sector BITE. Is the discrepancy an indication that independent restaurants are taking market share?
- On a year-over-year basis, retail sales were up 1.9%. As expected the Amazon-influenced nonstore retailers category did the heavy lifting with an 11% gain. Larger U.S. retail chains (WMT, SPLS, TGT, BBY, DG, COST, KR, WBA, CVS, LOW, HD, SWY) have been raising the issue of pricing pressure in recent conference presentations and guidance updates which could be a nagging sales deflator for the balance of the year.
- Previously: Retail sales disappoint in August (Sept. 15)
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE, CNDF, CNSF, IBUY, JHMC, JHMS.
Wed, Aug. 31, 11:49 PM
- Costco's (NASDAQ:COST) net sales grew 2.3% Y/Y to $8.9B in August.
- FQ4 net sales at $35.7B up 2.0% Y/Y, FY net sales at $116.1B up 2% Y/Y.
- Comp sales flat. U.S. flat, Canada +4%, Other international flat.
- Excluding the effects of gasoline prices and currency swings, comparable sales increased 2%; U.S. +2%, Canada +4%, Other international flat.
- Press Release
Wed, Aug. 24, 8:32 AM
- Nomura lowers its estimate on Costco's (NASDAQ:COST) FQ4 comparable store sales growth to 0% from 1% and cuts its view on EPS for the quarter to $1.75.
- "We take a slightly more cautious stance heading into 4Q results given the generally pressured traffic trends we have seen across the broader retail landscape this quarter, largely stemming from the highly competitive environment and the shift to online," writes analyst Jessica Schoen Mace.
- The investment firm keeps a Buy rating on Costco.
- Costco closed at $167.63 yesterday vs. a 52-week trading range of $132.65 to $169.73.
Fri, Aug. 12, 8:49 AM
- Retail sales came in flat for July with weakness in grocery stores, restaurants, and department stores standing out. The U.S. economy had produced three straight months of positive retail sales growth before the disappointment in July.
- Once again, the nonstore retailers category (primarily e-commerce) led growth with a 1.3% M/M and 14.1% Y/Y gain in July. Sales at health and personal care stores were also solid with a 7.8% Y/Y rise.
- Retail sales in June were revised to +0.9% from +0.7% in a positive development for the sector.
- Retail Sales report (.pdf)
- The S&P Retail ETF (NYSEARCA:XRT) is up 0.64% premarket to $45.55 as it looks to extend on yesterday's gain.
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE, JHMS, IBUY, CNSF, CNDF, JHMC.
- Related stocks: WMT, TGT, COST, SPLS, HD, LOW, AMZN.
Thu, Aug. 4, 12:40 AM| Thu, Aug. 4, 12:40 AM | 2 Comments
Fri, Jul. 29, 9:23 AM
- Household spending by consumers increased 4.2% in Q2 to mark the best pace for the category since late in 2014.
- The strong read on consumer spending contrasts with the tightening by businesses amid Brexit fears, F/X pain, and political jitters.
- Retail ETFs trail broad stock market averages on the year after a May swoon, although most of the damage has been from the mall sector. Companies with a thriving e-commerce business and/or high mix of U.S. sales have held up.
- Despite the painful headline Q2 GPD miss today, the underlying resiliency shown by consumers could bode well for a variety of retailers such as Amazon (NASDAQ:AMZN), Target (NYSE:TGT), Wal-Mart (NYSE:WMT), Costco (NASDAQ:COST), Kroger (NYSE:KR), Lululemon (NASDAQ:LULU), Dollar General (NYSE:DG), PriceSmart (NASDAQ:PSMT), and Williams-Sonoma (NYSE:WSM) to name a few (add your own ideas in the comments).
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE, JHMS, IBUY, CNSF, CNDF, JHMC