Key Takeaways

  • Costco's comparable sales growth accelerated to its fastest pace in more than four years, beating 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.
  • E-commerce comparable sales rose 41.2% compared to the year-ago quarter.
Costco Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
EPS Beat $2.75 $2.35
Revenue Beat $45.3B $43.7B
Comparable Sales Growth Beat 20.6% 16.0%

Source: Predictions based on analysts' consensus from Visible Alpha

Costco (COST) Financial Results: Analysis

Costco Wholesale Corporation (COST) reported Q3 FY 2021 earnings that dramatically beat analysts' expectations. Earnings per share (EPS) surpassed analyst forecasts by a wide margin, rising 45.5% year over year (YOY). Costco's revenue came in above analyst estimates, up 21.5% compared to the year-ago quarter. Comparable sales growth also beat analyst expectations. The company's shares were down about 0.1% in after-hours trading. Over the past year, Costco's shares have provided a total return of 30.9%, well above the S&P 500's total return of 38.4%.

COST Comparable Sales Growth

Costco's comparable sales growth accelerated to 20.6%, the fastest pace since at least the first quarter of FY 2017. 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 Q4 FY 2021) is estimated to be released on Sep. 22, 2021.