📊 PRO: This Week in Visuals
COST, ACN, MU
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Today at a glance:
🛒 Costco: Valuation Concerns.
🌐 Accenture: Gen AI Acceleration.
🪐 Micron: Outlook Surprise.
1. 🛒 Costco: Valuation Concerns
Costco Wholesale topped earnings estimates at $5.29 ($0.23 beat). Revenue grew 1% to $79.7 billion ($340 million miss). But there’s a catch! Costco follows a unique fiscal calendar, and Q4 included an extra week last year. Adjusting for this, net sales actually grew by a healthier 7%.
Costco is gaining market share over competitors like Walmart and Target. Company same-store sales grew 6.9%, above the 6.4% consensus. E-commerce remained a bright spot, up 19.5% during the quarter. In September, Costco raised its annual membership fee for the first time in seven years, from $60 to $65 (and from $120 to $130 for the executive membership).
However, concerns persist about the company's high valuation, above 50 times next year’s earnings, with some analysts suggesting it leaves little room for error. Costco executives are optimistic about the upcoming holiday season, expecting strong sales driven by deals and non-food items. The company is well-positioned for continued success. But maybe not at any price?