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Costco Wholesale Corporation (COST) is a membership warehouse business that offers members low prices on a limited selection of branded and private label products. As of February 2021, the company operated 803 warehouses across 45 U.S. states, Washington D.C., Puerto Rico and select international markets.
The company generated 72% of its revenue from the United States, 13% from Canada and the remainder from other international markets, including Mexico, the U.K., Japan, Korea, Taiwan, Australia, Spain, Iceland, France and China, during the first quarter of 2021. Approximately two percent of the company’s revenue came from membership fees during the quarter.
Costco recently reported sales that grew 17.6% to $18.2 billion in March 2021, as comparable sales rose 11.3% in the U.S. compared to an 8% consensus estimate. While the comparison year had one fewer shopping days and metered traffic, the period was characterized by a frenzy to stock up on products amid the COVID-19 pandemic shutdowns.
Analysts are bullish that these trends will continue as the comparable period should be easily beatable given the COVID-19 lockdown’s effects on shopping behavior. In addition, analysts believe that the company will retain market share as life returns to normal while stimulus payments moving further into the year could help boost sales further.
The company raised its quarterly dividend by 12.9% to $0.79 per share, with represents a 0.86% forward yield. The dividend is payable on May 14, 2021, to shareholders on record as of April 30, 2021.
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