Costco Wholesale Corporation continues to face challenges related to higher commodity prices, wages, transportation costs and supply chain disruptions. But there is a “little light at the end of the tunnel,” according to its executive vice president/chief financial officer, Richard A Galanti.
Galanti made the remarks on a conference call Thursday afternoon after the company released its fourth-quarter financial results, confirming that buzz about the brand is still strong.
The membership warehouse retailer reported Q4 EPS of $4.20, beating analysts’ estimates of $4.17. Net sales for the quarter rose at a 15% annual rate to $222.73 billion. Additionally, comparable sales for the quarter were strong across all regions, led by the US, which grew 15.6%. Meanwhile, e-commerce sales, an area dominated by Amazon, rose 7%.
However, Wall Street was unimpressed with the company’s performance, sending its shares lower in Thursday trading.
However, Anthony Denier, CEO of Webull, a trading platform, was pleased with the company’s performance.
“Despite rising inflation that bolstered prices, higher-income consumers showed strong demand for fresh food and fuel offerings,” he said in an email to International Business Time.
Gregory Ng, managing director at consumer consultancy Brooks Bell, was also impressed with Costco’s continued strong performance, as well as its ability to shake off the challenges the economy brings by providing value and a “personal” experience—such as displays of big-ticket items such as electronics and tires and taste testing new food products—to its customer base.
“It’s clear that Costco knows its consumers and has thrived on in-store retail engagement and experience standards,” Ng told IBT.
Meanwhile, Costco has capitalized on new retail trends, such as the merging of online and offline shopping, by launching Costco Next ( CN ). It’s a special category that includes a wide range of curated products from some of the company’s most trusted suppliers, allowing it to effectively compete with Amazon.
Ethan Chernofsky, VP of Marketing at Placer.ai, is impressed with the company’s ability to align with these critical retail trends, keeping buzz for the brand alive, with visits steadily rising above pre-pandemic levels. This makes him optimistic about the company’s prospects.
“Looking further into the future, the shift to the suburbs continues to drive value as younger audiences are introduced to the retail store,” he said. “The combination of this trend alignment, the strength of the retailer and the unique ‘stickiness’ of its model should position Costco for even greater success in the future.”
Editor’s Note: The author owns shares of Costco