Costco (NASDAQ:COST) exceeded expectations with its fiscal third-quarter results announced Thursday, fueled by consumers stocking up amid inflation worries and potential tariff-driven price increases.
Following the earnings release, Costco shares traded relatively flat in U.S. premarket trading on Friday.
For the 12-week period ending May 11, the members-only warehouse club reported diluted earnings per share of $4.82 on revenue of $61.96 billion, beating analyst estimates of $4.24 per share and $63.11 billion in revenue. Comparable sales, which include gas and currency fluctuations, rose 8% year-over-year.
Bernstein analysts praised the results as a “solid quarter with industry-leading merchandising.” They noted, “Costco remains the highest-quality company in our coverage, with many years of global warehouse expansion ahead. However, at a price-to-earnings ratio of 53.5x, the stock is priced for perfection.” The team added that any slowdown in Costco’s robust high single-digit comparable sales growth could pose downside risk and potentially create a more attractive buying opportunity.
Jefferies analysts echoed optimism, maintaining a Buy rating on Costco stock. They highlighted that Costco is expected to continue opening new warehouses, drive membership fee income growth, and sustain a relatively stable margin profile in the coming quarters.