Costco Q3 FY2022 Earnings Report Recap

COST matched on earnings and beat on revenue

Key Takeaways

  • Costco's comparable sales growth accelerated slightly from the previous quarter, coming 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 7.4% year over year.
Costco Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
EPS Match $3.04 $3.04
Revenue Beat $52.6B $51.3B
Comparable Sales Growth Beat 14.9% 11.1% 

Source: Predictions based on analysts' consensus from Visible Alpha

Costco (COST) Financial Results: Analysis

Costco Wholesale Corporation (COST) reported Q3 FY 2022 earnings that matched analysts' expectations. Earnings per share (EPS) were in line with analyst forecasts, rising 10.5% year over year (YOY). Costco's revenue beat analyst estimates, up 16.2% compared to the year-ago quarter. Comparable sales growth also surpassed analyst expectations.

The company's shares fell slightly in extended trading. Over the past year, Costco's shares have provided a total return of 21.4%, well above the S&P 500's total return of -5.2%.

Note that Costco's 2021 fiscal year (FY) ended Aug. 29, 2021. That makes the current reporting period Q3 FY 2022, which ended May 8, 2022.

COST Comparable Sales Growth

Costco's comparable sales grew 14.9% YOY, marking a slight acceleration 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 will be for Q4 FY 2022.

Article Sources
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  1. Visible Alpha. "Financial Data."

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

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

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