Upcoming AWS Coverage on Ollie's Bargain Outlet Holdings Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 14, 2016 / Active Wall St. announces its post-earnings coverage on Costco Wholesale Corp. (NASDAQ: COST). The Company reported its first quarter fiscal 2017 earnings results on December 07, 2016. The second largest retailer in the US (by revenue) posted a 3.2% increase in revenue; however, the Company's earnings and sales numbers came in below market expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Costco Wholesale's competitors within the Discount, Variety Stores space, Ollie's Bargain Outlet Holdings, Inc. (NASDAQ: OLLI), reported on December 07, 2016, its financial results for the third quarter ended October 29, 2016. AWS will be initiating a research report on Ollie's Bargain Outlet in the coming days.

Today, AWS is promoting its earnings coverage on COST; touching on OLLI. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=COST

http://www.activewallst.com/registration-3/?symbol=OLLI

Earnings Reviewed

For the three months ended on November 20, 2016, Costco reported net sales of $27.47 billion, up 3%, compared to net sales of $26.63 billion during Q1 FY16. Costco's sales numbers fell short of analysts' estimate of 28.38 billion. Costco's comparable sales (Comp) increased 1% on a y-o-y basis. The company's Comp were negatively impacted by weaker FX relative to the US dollar and slightly impacted by gas price deflation. Excluding gas and FX, Comp would have increased to 2%. The total comp increase of 1% was a combination of an average transaction decrease of 1.3% on a reported basis and an average shopping frequency increase of 2.2%.

Costco's net income for Q1 FY17 was $545 million, or $1.24 per diluted share, compared to $480 million, or $1.09 per diluted share, last year. The company's Q1 FY17 net income benefited from a non-recurring $51 million ($.07 per diluted share after tax) legal settlement. Excluding the legal benefit, the company reported net income of $1.17 per share, which was below Wall Street's expectations of $1.19 per share.

Delving Deeper

During Q1 FY17, Costco's Membership fees increased 6.2% from the year ago quarter to $630 million. In terms of the number of members, the company's Gold Star which stood at 36.8 million accounts at the end of Q1 FY16, was 37.1 million at the end of Q1 FY17. Costco's Primary business membership was 7.3 million, both at the end FY16 and Q1 FY17. The company's total household memberships increased to 47.9 million at the end of the reported quarter compared to 47.6 million at the end of the previous fiscal year.

As on November 20, 2016, executive members stood at 17.7 million member households, an increase of 348,000 since the end of the previous quarter. Costco's business renewal rate, which at end of FY16 stood at 94.4%, came in at 94.3% renewal rate at the end of Q1 FY17. Gold Star renewal rate was at 89.5% for the previous quarter.

Costco's reported gross margin in Q1 FY17 was higher by 29 basis points on a y-o-y basis, coming in at 1,158 this year versus 1,129 in Q1 FY16. During the reported quarter, Costco's operating income advanced 10.7% on a y-o-y basis to $849 million, whereas operating margin as a percentage of sales expanded 20 basis points to 3%.

Store Update

Costco currently operates 723 warehouses, including 506 in the United States and Puerto Rico, 94 in Canada, 36 in Mexico, 28 in the United Kingdom, 25 in Japan, 12 in Korea, 12 in Taiwan, 8 in Australia, and 2 in Spain. Costco also operates electronic commerce web sites in the US, Canada, the UK, Mexico, Korea, and Taiwan. During Q1 FY17, Costco opened 8 net new locations and completed 1 relocation. For FY17, the company is planning to open 34 locations, including 3 relocations.

Liquidity and Capital Resources

During Q1 FY17, Costco's accounts payable as a percent of inventories came in at 103% up from 100% in Q1 FY16. Excluding non-merchandise payables it improved from a 90% in Q1 FY16 to 93% in Q1 FY17. The company's average inventory per warehouse was lower by about $67,000 per warehouse from $14.9 million in the year ago period to $14.83 million per location in the reported quarter. In terms of CapEx, Costco spent approximately $670 million during the Q1 FY17, and for FY17 the company is expecting CapEx in the range of $2.6 billion to $2.8 billion compared to $2.6 billion incurred during FY16. As of November 20, 2016 Costco had cash and cash equivalents of $4.81 billion and long-term debt of $3.93 billion.

Stock Performance

Costco Wholesale's share price finished yesterday's trading session at $159.77, slightly down by 0.35%. A total volume of 3.55 million shares exchanged hands, which was higher than the 3 months average volume of 2.45 million shares. The stock has advanced 6.97% and 6.35% in the last month and past three months, respectively. Furthermore, since the start of the year, shares of the company have gained 0.06%. The stock is trading at a PE ratio of 29.14 and has a dividend yield of 1.13%.

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SOURCE: Active Wall Street