Costco's Third Quarter 2016 Beats the Street
ISSAQUAH, WA - Costco has released its third quarter financial report, spurring its highest period of stock growth in more than six years. In a particularly rough retail climate, the company was able to beat analysts’ estimates for earnings and maintain investors confidence.
During the third quarter, Costco’s net income rose 5.6 percent to reach $545 million. At $1.24 a share, this beat what Bloomberg reports was the average analysts estimate of$1.22 a share. Following this announcement, Costco’s share price jumped over 6 percent to $153.88 as a high, the most since September 2009, according to Bloomberg. As of 12:30 PM EDT, shares were up a little over 4 percent.
Earlier this week, we had reported on analyst Jim Cramer’s theory that company shares could jump as high as eight percent following the finalization of Costco's projected revenue increases.
On the other hand, total sales for Costco missed the mark, climbing 2.6 percent to reach $26.77 billion, off from the $27.07 billion that analysts expected. Comparable sales, sales in stores open at least a year, also remained flat in the third quarter, rising 1 percent in Canada and falling 2 percent in all other countries.
Costco currently operates 705 warehouses, including 493 in the United States and Puerto Rico, 90 in Canada, 36 in Mexico, 27 in the United Kingdom, 25 in Japan, 12 in Korea, 12 in Taiwan, eight in Australia and two in Spain. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.