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Today at a glance:
🛒 Costco: Growth Moderates
🌐 Accenture: Federal Spending Cuts
1. 🛒 Costco: Growth Moderates
Costco closed out FY25 (ending in August) with Q4 revenue growing 8% Y/Y to $86.2 billion ($100 million beat) and EPS of $5.87 ($0.06 beat). However, the beat was overshadowed by moderating growth in adjusted same-store sales to +6.4% globally and +6.0% in the US (down from 8.0% and 7.9% last quarter, respectively).
In contrast, the fundamentals of the business model remained strong. Membership fee income surged 14% to $1.72 billion, driven by upgrades to its Executive tier following the rollout of new perks like exclusive shopping hours. E-commerce remained a bright spot, growing 13.5%. The company continues to navigate tariff pressures by increasing the penetration of its higher-margin Kirkland Signature private label, attracting younger members.
Looking ahead, Costco announced plans to open 35 new warehouses in FY26, a significant uptick from the 25 added in FY25. That said, the stock remains priced for perfection. The deceleration in comparable sales growth is testing Costco’s premium valuation of ~49x forward earnings.
