By Jeremy C. Owens
The COVID-19 pandemic led to Costco Wholesale Corp.’s biggest annual growth in profit and sales since the 1990s, according to financial results reported by the retailer Wednesday.
Costco (NAS:COST) reported fiscal fourth-quarter earnings of $1.67 billion, or $3.76 a share, on Wednesday afternoon, up from $3.51 a share a year ago. Sales jumped to $61.44 billion from $53.38 billion in the same quarter last year, topping $60 billion in quarterly sales for the first time in the company’s history.
For the full year, Costco sales grew 17.7% to $192.05 billion from $163.22 billion in the 2020 fiscal year, the largest year-over-year growth for Costco since the 1992 fiscal year, when sales grew 19.6%, according to FactSet. Annual profit rose more than 25% to $5.01 billion from $4 billion, a record earnings total for Costco and the largest annual growth in profit since 1998, according to FactSet records.
Analysts on average expected quarterly earnings of $3.58 a share on sales of $61.41 billion, according to FactSet. Costco shares increased about 0.8% in after-hours trading following the release of the results, after gaining 0.1% to $452.78 in the regular session.
Costco “has so often showed that it can be a winner in different environments (during the financial crisis, during a pro-consumer discretionary period, during a pandemic, etc.),” JP Morgan analysts, who have an overweight rating and $475 price target on the stock, wrote earlier this month. “As 2021 progresses, whether the consumer is eating more at home or feeling good enough to engage in the treasure hunt atmosphere of its 140K s.f. stores (or use its attractive travel options), we see Costco as a share gainer.”
Costco stock has increased 20.1% so far this year and 31.3% in the past 12 months, as the S&P 500 index (S&P:SPX) has grown 17% and 35.8% in those periods.