Costco (COST) Tops FQ4 Estimates, Seen as Another 'Impressive' Quarter

Shares of Costco Wholesale (NASDAQ: COST) are up nearly 1% in pre-open Friday after the company delivered better-than-expected fiscal Q4 results.

Telsey Advisory Group analyst Joseph Feldman raised the price target to $480.00 per share from the prior $470.00 following an “impressive quarter.” “In 4QF21, we were encouraged by: 1) solid membership fee income growth of 11.6% (9.7% in CC), with the US & Canada and worldwide renewal rates both sequentially up 300 bps to 91.3% and 88.7%, respectively; 2) e-commerce growth of 11.2% (8.9% in CC) on top of an increase of 90.6% (91.3% in CC) in 4QF20, helped by new products, digital marketing, and faster delivery via Costco Logistics; 3) the return of ancillary businesses, with strong growth of gas, food court, and travel bookings; and 4) strong total expense leverage of 72 bps, despite a permanent increase in hourly wages. The one blemish in the quarter was the core-on-core gross margin decline of 40 bps due to lapping Fresh Foods gains from last year,” Feldman said in a note sent to clients.

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