Costco’s Fiscal Q4 Results Show Modest Growth
The warehouse retailer posted steady earnings for its fiscal fourth quarter 2024.
Costco Wholesale (COST -0.77%), the popular warehouse club, released mixed results for its fiscal 2024 fourth quarter after the closing bell on Sept. 26. Net sales climbed by 1% to $78.2 billion — a more impressive result given that this year’s quarter was 16 weeks long while the previous year’s was 17 weeks. Net income reached $2.354 billion, or $5.29 per diluted share, up from $4.86 per share a year prior.
Metric | Fiscal Q4 2024 | Fiscal Q4 2023 | % Change |
---|---|---|---|
Net sales | $78.2 billion | $77.4 billion | 1.0% |
Earnings per share | $5.29 | $4.86 | 8.8% |
Total revenue | $79.697 billion | $78.939 billion | 1.0% |
Net income | $2.354 billion | $2.160 billion | 9.0% |
Membership fees | $1.512 billion | $1.509 billion | 0.2% |
Operating income | $3.042 billion | $2.781 billion | 9.4% |
Overview of Costco Wholesale
Costco Wholesale operates on a membership model, requiring customers to purchase a membership to shop at its warehouses and online platforms. It runs 861 warehouse stores globally and offers high-quality, low-priced products, including its many sold under its private label Kirkland Signature brand.
For the full fiscal year, net sales increased by 5% to $249.6 billion. Net income also grew, reaching $7.367 billion, or $16.56 per diluted share, compared to $6.292 billion or $14.16 per diluted share in fiscal 2023.
Notable Developments
The company’s revenue model continues to thrive, particularly its membership program. Membership fee income was up slightly to $1.512 billion from $1.509 billion in the prior-year quarter. For the fiscal year, membership fees amounted to $4.828 billion.
Costco’s merchandise costs rose to $69.588 billion for the quarter, up from $69.219 billion a year earlier. Also, selling, general, and administrative (SG&A) expenses climbed to $7.067 billion from $6.939 billion.
The company’s e-commerce segment posted robust comparable sales growth of 18.9% for the quarter and 16.1% for the fiscal year. This reflects Costco’s continued success in transitioning towards digital platforms, aligning with global shopping trends.
Operating income for the quarter came in at $3.042 billion, up from $2.781 billion in the previous year’s fourth quarter. This improvement signals healthy operational performance despite increased expenses.
The company’s international segments also saw solid growth. Comparable sales in the U.S. grew by 5.3% for the quarter and 4.5% for the fiscal year, while Canada reported growth rates of 5.5% for the quarter and 7.0% for the year. Other international markets reported 5.7% growth for the quarter and 8.1% for the year.
Looking Ahead
Costco’s management did not offer specific guidance for earnings or revenue for the next quarter or fiscal year.
Investors should keep an eye on Costco’s ability to manage rising operating expenses while enhancing its online and ancillary business segments. Maintaining operational efficiency and sustaining customer satisfaction through its membership model will remain crucial for its future success.
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