(By David) Costco Wholesale Corporation (NASDAQ: COST) is scheduled to release its fiscal 2nd quarter 2010 earnings on Thursday March 4th 2010. COST is a discount retailer that has a high volume low margin business that requires shoppers to pay a membership fee.
Costco Wholesale Corporation operates membership warehouses that offer a selection of branded and private label products in a range of merchandise categories in no-frills, self-service warehouse facilities. The company operates a chain of 560 warehouses comprising 407 in 40 states and Puerto Rico, 77 in Canada, 21 in the United Kingdom, 7 in Korea, 6 in Taiwan, and 9 in Japan, as well as 32 warehouses in Mexico and 1 in Australia. Costco Wholesale Corporation also offers its products through costco.com in the U.S. and through costco.ca in Canada. The company, formerly known as Costco Companies, Inc., was founded in 1976 and is based in Issaquah, Washington.
For the first fiscal quarter of 2010, which ended on November 22nd 2009, Costco reported earnings of 60 cents per share on 17.2 billion dollars of revenue which were in line with analyst estimates. Reported sales increased by 5.5% to 16.9 billion dollars. Comparable store sales increased by 3%, which consisted of a 1% increase in the United States and a 13% increase internationally. The average transaction decreased by 1.5%, while the frequency of customer visits was up by 5%. Membership renewal rates remained at 87%, and membership fees of 377 million dollars were in line with estimates. Gross margins of 10.8% were down 9 basis points on a year over year basis.
Earnings per share estimates for fiscal 2010 remain stable at $2.91 per share. For the second quarter ESP estimates are 71 cents per share and have remained at that level for the past 90 days. The range of estimates has the low at 66 cents and a high of 76 cents. Revenue estimates for the second quarter have a range of 18.13 billion at the low end and 19.07 billion at the high end of the range with an average estimate at 18.51 billion in revenue. COST as of the end of the fiscal fourth quarter had 4.2 billion dollars of cash and short term securities which equates to approximately $9 per share and places COST in a solid liquid position.
COST has a 52 week range of 38-17 -61.36 and the company is currently trading at the top end of that range. Costco price has increase more than 60% over the past 12 months and it is currently trading with a PE ratio of 25. COST has a market cap of26.87 billion dollars and a debt to equity ratio of 22%. The company has a 3 year earnings per share growth rate of 3%, a 3 year sales growth rate of 6% and an annual return on equity of 11%.
