On December 8th Costco Wholesale Corporation (COST) posted results for Q1 of FY2023 ending November 20th. This Big-Box club store chain serves as a bellwether for hybrid retail in-store and on line spending and is a barometer of consumer confidence, offering groceries, household necessities in bulk in addition to discretionary recreational and electronic items.
For the quarter, the Company earned $1,364 million on revenue (including fuel and membership fees) of $54,437 million with a diluted EPS of $3.07. For the corresponding Q1 of FY2022, Costco earned $1,624 million on equivalent revenue of $50,363 million with a diluted EPS of $2.98. Revenue was 8.1 percent higher than in Q1 of FY2022 and net earnings rose by 3.0 percent. Gross margin for Q1 FY2023 declined to 8.9 percent compared to 11.1 percent in Q1 FY2022, attributed to higher cost of goods sold in an inflationary environment. Concurrently operating margin fell from 3.4 percent in Q1 FY2022 to 3.3 percent for the most recent quarter associated with increased freight, transport, wages and utilities.
Total adjusted comparable same-store sales for Q1 2023 (excluding fuel and foreign exchange) attained 7.1 percent. U.S. same store sales were up 6.5 percent; Canada by 8.3 percent and the Other International category, 9.1 percent.
On November 20th Costco posted total assets of $66,027 million. Long-term debt and lease obligations attained $11,484 million. Costco had an intraday market capitalization of $218,880 million on December 8th. COST trades with a forward P/E of 33.9 and has ranged over the past fifty-two weeks from $406.51 to $612.27 with a 50-day moving average of $495.04.
Twelve-month trailing operating margin was 3.4 percent and profit margin 2.6 percent. The Company generated a return on assets of 7.9 percent and 30.6 percent on equity.
At the end of Q1 FY2023, Costco operated 847 warehouses. There are 583 in the U.S; 107 in Canada; 40 in Mexico; 31 in Japan; 29 in the U.K. and 57 others in seven nations among the E.U., Asia and Australia.