Costco Q2 FY2022 Earnings Report Recap

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Costco (COST) Financial Results: Analysis

Costco Wholesale Corporation (COST) reported Q2 FY 2022 earnings results that beat analysts' expectations. Earnings per share (EPS) came in above analyst forecasts, rising 36.4% year over year (YOY). Costco's revenue surpassed analyst estimates, up 15.9% compared to the year-ago quarter. Comparable sales growth also exceeded analyst expectations. The company's shares fell slightly in extended trading. Over the past year, Costco's shares have provided a total return of 65.7%, well above the S&P 500's total return of 14.2%.

Note that Costco's 2021 fiscal year (FY) ended Aug. 29, 2021. That makes the current reporting period Q2 FY 2022, which ended Feb. 13, 2022.

COST Comparable Sales Growth

Costco's comparable sales grew 14.4% YOY, marking a slight deceleration from the previous quarter's pace of growth. Costco, which operates on a membership-based model, defines comparable sales as net sales generated from its membership warehouses (including relocations, remodels, and expansions), as well as e-commerce websites that have been in operation for over one year. Growth in comparable sales is achieved through an increase in the shopping frequency from new and existing members as well as in the amount they spend per visit. When comparable sales are growing, it's a sign that existing sales channels have not yet saturated the local market, nor are those sales being cannibalized by the company's newly opened stores.

Costco's next earnings report (for Q3 FY 2022) is expected to be released on May 26, 2022.