Costco Wholesale Corp. (COST, Financial) informed the market Wednesday after close that net sales were $13.64 billion in September, reflecting a 10.27% increase year-over-year.
Comparable sales grew 10.4% in the U.S., 2.9% in Canada and 4.3% in the international market. The company's total comparable sales went up 8.4% in September. Sales from e-commerce increased 28.6%.
Excluding the impact of gasoline prices, currency swings and the adoption of new standards for the recognition of revenues, same-store sales in September increased 7.7% in the U.S., 6.4% in Canada and 6.2% outside of North America.
The company's total comparable sales grew 7.3%, and e-commerce sales went up 25.7%.
These figures suggest that Costco is on track to beat consensus on revenues for the first quarter of fiscal 2019. The trimester will end Nov. 30, 2018, and the consensus is for total revenues of $34.23 billion, which is already a 7.6% growth from the same quarter of last fiscal year.
The chart below illustrates Costco Wholesale Corp.’s total quarterly revenues over the last five trimesters.
The chart below illustrates Costco Wholesale Corp.’s total first-quarter revenue over the last five fiscal years.
We may witness a rise in the share price of Costco over the coming days. The share price was $221.05 at market close on Wednesday, Oct. 10.
The stock climbed 41% for the 52-week period through Oct. 10 and outperformed the S&P 500 index by more than 30%. The stock in Costco is trading below the 50-day simple moving average line but above the 100- and 200-SMA lines:
The stock is reporting a 52-week range of $156.36 to $245.16 per share.
The company is distributing a 57-cent cash quarterly dividend per common share. If the quarterly distribution is held constant, it leads to a forward annual dividend of $2.28 per share, granting a 1.04% yield. The industry has a median forward dividend yield of 2.22%. This means that many direct peers are now beating Costco in terms of higher forward dividend yield, as is the S&P 500 index with a dividend yield of 1.88% as of Wednesday.
The following chart from GuruFocus is also suggesting that Costco may not be trading cheaply since the share price at market close on Oct. 10 is far above the Peter Lynch Earnings Line (P/E = 15):
Further indications of an expensive stock stem from a price-book ratio of 7.64 versus an industry median of 1.73 and a price-sales ratio of 0.7 compared to an industry median of 0.48
However, the stock has a recommendation rating of 2.2 out of 5, and the average target price of $241.58 per share reflects 9.3% growth within the next 12 months.
Disclosure: I have no positions in Costco Wholesale Corp.
