Costco (NASDAQ: $COST) released its fourth quarter fiscal 2024 results on Thursday after markets closed to a tepid market reception. While it exceeded earnings estimates, it missed several critical metrics.
Costco Posts Mixed Q424 Results
Costco reported a net income of $2.35 billion in the fourth quarter, a 7% year-over-year increase or $5.29 per share, above estimates of $5.08 per share. The company’s revenue rose 1% year over year during the quarter to $79.69 billion, falling short of the forecast of $79.91 billion.
Membership fee revenue increased slightly to $1.51 billion, falling short of the forecast of $1.55 billion. Meanwhile, comparable sales rose 5.4% in the fourth quarter, missing estimates of 5.7%. Costco reported comparable US sales of 5.3% and 5.5% in Canada, which is a marketed slowdown from the previous quarter.
Ecommerce sales were up 18.9%, but fell short of estimates as the pace slowed down from over 20% in the previous quarter.
The giant retailer ended the fourth quarter with 891 warehouses, an increase from the 878 reported the previous quarter. Its US locations rose by nine to 614.
Full Year Results
Costco reported a net income of $7.37 billion, or $16.56 per share, for fiscal 2024, compared to a net income of $6.29 billion, or $14.16 per share the previous year. Full-year revenue increased 5% year over year to 254.45 billion, while total comparable sales came in at 5.3%.
Costco’s Balance Sheet
Costco had $11.34 billion in net cash from operations at the end of the fiscal year, and $9.91 billion in cash and cash equivalents.
Costco (COST) Market Performance
Following the release of its mixed Q4 fiscal 2024 results, COST shares fell over 1% to around $891.54 in premarket trading. COST shares have performed better than the market, rising 36.57% year to date, compared to the 19.97% gain of the S&P 500 in the same period.
Over the past 12 months, COST shares have gained 63.02% compared to the 33.90% gain of the S&P 500 in the same period. Over the past month, the share are up 1% compared to the 1.9% gain of the S&P 500.
Analysts remain cautiously optimistic about Costco’s future stock price. They give COST shares an overall moderate buy rating, and they predict a wide range of forecasts with a high of $1,061, and a low of $800. Thew average price target of $932.15 is a 3.41% upside based on Thursday’s closing price of 901.44 per share.
Could $COST Soar Higher?
Costco has had a great run in 2024, and over the past 12 months. The share price is up by nearly 40% since the start of the year, and by over 60% in the past 12 months. Consequently, some investors might wonder if there is still room to soar for the stock.
One of the key drivers of growth for Costco could be its ecommerce business. Since the start of 2024, ecommerce sales have been growing at nearly triple the rate of total company sales every month. In its most recent results, full-year e-commerce sales were up 16.1% compared to total company sales of 5.3%.
Another strong point for the company is its strong cash flow. It ended the year with around $9.9 billion in total liquidity, giving it plenty of room to grow its promising ecommerce segment and the accompanying logistics infrastructure. During the pandemic era, Costco proved its resilience, generating growth while others struggled.
While some key metrics missed estimates in the fourth quarter, Costco’s business model has proven its resilience, and in the long-term, it could potentially be worth having in your portfolio.
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