Costco checks out strong
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What were Costco’s key earnings highlights and why did they beat expectations?
Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors every morning. We made it to Friday. Today is September 25th. I'm Julie Morgan. Costco delivered another better-than-expected quarter with a top-and-bottom-line beat, above consensus growth in membership fees, and comparable sales that exceeded Wall Street's expectation. The big-box retailer also reported a double-digit increase in comparable sales for its digital channel for the period ending August 30th. Total revenue, including a 7% increase in membership fees of $1.85 billion, increased 12% to $95.72 billion, beating estimates by $830 million and contributed to a profit of $6.57 per share. The bottom line improved 15% year-over-year and was 5 cents better than expected.
These results included a non-recurring benefit of $0.15 per share from IEPA tariff refunds received during the fiscal fourth quarter.
How did Costco’s comparable sales grow across U.S., Canada, and international markets?
Comparable sales in the U.S. were up 7.2% on an adjusted basis, up 4.6% in Canada, and rose 6.2% in other international markets, resulting in a 9.4% increase in company-wide comparable store sales. General Motors and Ford have suffered the largest U.S. market share losses among automakers this year, as high gas prices drive consumers toward fuel-efficient vehicles. According to a Cox Automotive forecast, Ford's vehicle sales are expected to drop 8.8 percent through the first three quarters of the year. The forecast said this would knock Ford's market share down nearly a full percentage point to 12.5%. GM's U.S. vehicle sales are also underperforming the broader industry. which Cox projects will decline 6.2% year-to-date through September 30th.
Why are Ford and General Motors losing U.S. market share amid high fuel prices?
Cox expects GM to end the quarter with a 16.7% market share, down from 17.4% a year earlier. Meanwhile, Tesla's year-to-date sales are projected to drop 18.9% year-over-year, pulling its market share down to 3% from 3.7%. Starbucks is closing more locations. The coffee giant will close approximately 250 stores later this week. The company said the locations to be closed are where the chain does not believe it can consistently deliver the experience it wants for customers and partners, or where a path to acceptable financial performance does not exist. The new closures represent approximately 1% of Starbucks' more than 18,000 North American coffeehouses. Now for a look at a few other articles that are trending.
Michael Burry warns of write-offs by hyperscalers as AI spending surges. The Oracle Blue Owl Project delay puts a spotlight on AI financing.
What is Starbucks’ plan for closing 250 stores and how will it affect its North‑American footprint?
On Wall Street at this early hour, stock index futures are in the green. Crude oil is down 2.3% at $92 a barrel. Brent crude is down 1.6% at $104. The FTSE 100 is up 0.6% and the DAX is up 1.1%. And South Korea's KOSPI market was closed for a holiday. The same is true for China's market. And on today's economic calendar at 8.30 a.m., durable goods orders and at 10 a.m., consumer sentiment. That's it for today's Wall Street Breakfast. Thanks for listening.
Which other market trends and macro data were highlighted in today’s Wall Street Breakfast?
To take full advantage of Seeking Alpha with coverage on significant stocks and ETFs, become a premium subscriber. Check out seekingalpha.com slash subscriptions. I'm your host, Julie Morgan. Go out and make it a great day.
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Chapters
5 chapters
1
What were Costco’s key earnings highlights and why did they beat expectations?
0:01–1:05
2
How did Costco’s comparable sales grow across U.S., Canada, and international markets?
1:05–2:01
3
Why are Ford and General Motors losing U.S. market share amid high fuel prices?
2:01–3:08
4
What is Starbucks’ plan for closing 250 stores and how will it affect its North‑American footprint?
3:08–3:47
5
Which other market trends and macro data were highlighted in today’s Wall Street Breakfast?
3:47–4:02