Costco Q4 Earnings

COSTCO

Costco released its Q4 FY2024 earnings today (9/26), with the stock dropping over 1% due to a revenue miss. The company reported net sales of $78.2 billion, slightly below expectations. However, membership fees rose by 6.5% to $1.51 billion, despite a small dip in membership renewal rates due to an online promotion.

On a positive note, Costco (COST) beat earnings estimates with non-GAAP EPS of $5.29 per share, surpassing the expected $5.07. Margins are also improving, and with a membership fee increase coming in Q1 FY2025, Costco is set to see continued earnings growth.

Looking ahead, Costco plans to open 26 new warehouses in FY2025, slightly fewer than the 30 added this year. While this may slow revenue growth, Costco's expansion remains on track.

Despite the solid earnings, some analysts still view Costco as overvalued. With the stock trading near $890 per share, there is concern that it could drop further, as current valuations don’t align with the company’s projected 6-9% annual sales growth over the next five years.

In summary, while Costco remains a strong business, its current valuation may not offer enough upside for long-term investors.