Costco Wholesale Corporation has exceeded market expectations in its latest quarterly earnings report.
According to Korea Investment & Securities, Costco’s revenue for the first quarter of fiscal year 2025 (spanning September 2 to November 24, 2024) reached $62.2 billion, representing a 7.5% year-over-year increase. The company’s GAAP earnings per share (EPS) rose to $4.04, a 12.8% increase from the previous year. Both revenue and EPS surpassed market forecasts by 0.3% and 6.0%, respectively.
Last September, Costco raised membership prices in North America, initially raising concerns about a significant decline in renewal rates. However, the company’s North American renewal rate showed only a slight decrease compared to the previous quarter, highlighting strong consumer loyalty. The number of paid memberships grew by 7.6% year-over-year.
Kim Myung Joo, a Korea Investment & Securities analyst, observed that the North American membership renewal rate exceeded market concerns, pointing to Costco’s high-performance stability. She predicted that the stock would continue its positive momentum.
Costco’s stock has surged 52.8% this year, outperforming the S&P 500 by 25.2 percentage points.
Costco has been expanding its private-label offerings to strengthen its core retail business. Recent additions include Kirkland-branded plastic bags and detergents. Private-label products account for about 33% of Costco’s total offerings, and sales in this category are growing faster than overall revenue.
In the e-commerce space, Costco has maintained double-digit growth in online sales thanks to its logistics service for bulk product delivery.
Kim attributes Costco’s premium valuation over other retailers to its strong consumer loyalty and consistent performance.
Since the end of the COVID-19 pandemic, Costco has either met or exceeded market expectations for eight consecutive quarters based on adjusted EPS.
Kim stated, “While we don’t expect dramatic stock price surges due to the company’s focus on its core retail business, Costco’s stable performance and consistent results should support steady stock price trends.”
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