Costco Q2 FY2022 Earnings Report Recap

COST beat on earnings and on revenue

Key Takeaways

  • Costco's comparable sales growth decelerated slightly from the previous quarter but came in above analysts' expectations.
  • Comparable sales growth is a key metric of Costco's revenue growth from its warehouses and e-commerce sites that have been in operation for at least one year.
  • Costco's e-commerce sales rose 12.5% year over year.
Costco Key Stats
Metric Beat/Miss/Match Reported Value Analysts' Prediction
EPS Beat $2.92 $2.73
Revenue Beat $51.9B $51.3B
Comparable Sales Growth Beat 14.4% 11.8%

Source: Predictions based on analysts' consensus from Visible Alpha

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.

Article Sources

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  1. Visible Alpha. "Financial Data."

  2. Costco Wholesale Corp. "Costco Wholesale Corporation Reports Second Quarter and Year-to-Date Operating Results for Fiscal 2022 and February Sales Results."

  3. TradingView. "Price Chart: COST and S&P 500."

  4. Costco Wholesale Corp. "Form 10-K for the Fiscal Year Ended August 29, 2021," Page 22.

  5. Yahoo! Finance. "Earnings Calendar: COST."

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