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No. of Recommendations: 9
On 12/9/21, Costco Wholesale reported Q1 FY 2022 results. At a summary level, Costco exceeded consensus earnings and revenue estimates. E-commerce segment experienced growth as a result of strong execution despite the waning impacts of COVID.

Before we get started - Be sure to check out the links section of the post for the conference call transcript, and other articles from the Foolish universe on Costco's latest Q1 FY22 results.

Q1 Summary:

For Q1, Costco surpassed earnings and revenue consensus estimates. As seen over the past few months of sales figures, we still see robust comps and huge growth in the e-commerce segment.

One of the best ways to gauge Costco’s health is revenue from membership fees. In Q1, membership fee revenue was $946 Million, an increase of ~9.87% compared to $861 Million last year. The numbers show a healthy, growing membership base.


Q1 2022 Operating Results:

The Q1 comparable sales were up across the board, with E-commerce increase of 14.3%. Net sales for the quarter of $49.42 Billion was an increase of 16.7% compared to the $42.35 Billion last year. Net income for Q1 was ~$1.32 billion, or $2.98 per diluted share, compared to ~$1.16 billion, or $2.62 per diluted share, last year.

This quarter had notable impacts to net income. The quarter was impacted by a tax benefit of $91 Million, or $0.21 per share for stock based compensation with another $118 million, or $0.20 per share pre-tax write off for some technology assets.

Comparable Sales (Q1)

U.S. 14.9%
Canada 17.2%
Other International 13.4%
Total Company 15.0%
E-commerce 14.3%

Comparable Sales (ex Gasoline Price & Foreign Exchange - Q1)

U.S. 9.9%
Canada 8.3%
Other International 10.9%
Total Company 9.8%
E-commerce 13.3%

Costco's consistent execution in a COVID-19 world in store and e-commerce led to another strong quarter of performance and growth. It was mentioned on the conference call that Costco was managing supply chain challenges effectively despite some ebbs and flows in merchandise lead times and availability. Another strong year from Costco with store expansions and membership growth, in my opinion.

Approximately 69% of Costco’s 828 warehouses are located within the United States. This leaves roughly a third of Costco’s warehouses exposed to potential positive or negative impacts from a strong US Dollar as well as fluctuations in food and gasoline prices. Warehouse breakdown: 572 in the United States and Puerto Rico, 105 in Canada, 40 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, 4 in Spain, 2 in France, 2 in China, and 1 in Iceland. Costco e-commerce presence spans the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia.



Link to Press Release:

https://investor.costco.com/news-releases/news-release-detai...


Link to Conference Call Transcript:

https://www.fool.com/earnings/call-transcripts/2021/12/10/co...


Links to more Foolish coverage:

Why Costco Stock Jumped Today: https://www.fool.com/investing/2021/12/10/why-costco-stock-j...

Inflation Is Soaring -- and These 2 Stocks Are Still Rising: https://www.fool.com/investing/2021/12/10/inflation-is-soari...

3 Growth Stocks to Put Under the Tree This Year: https://www.fool.com/investing/2021/12/14/3-growth-stocks-to...




If you like this type of coverage and would like to see more of it, let me know by hitting the "Recommend It!" button or leave a comment.


CMFHeavyMetal

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Ticker Guide for Costco Wholesale (COST), Facebook (FB), iQiyi (IQ), Magellan Midstream Partners (MMP), OrganiGram Holdings Inc. (OGI), Pegasystems Inc. (PEGA), Retail Opportunity Investments Corp. (ROIC), & Upwork (UPWK)
Disclosure: May own shares of some, or all of the companies mentioned in this post. (http://tinyurl.com/HM-Disclosure)
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