Costco’s winning streak continues as e-commerce grows

Dive Brief:

• Costco on Thursday reported that 4th quarter net sales rose 5% to $43.4 billion, up from Q4 in 2015 (that included an additional week). Net earnings in the quarter reached $1.04 billion, up from $919 million last year. Membership costs increased to $997 million in the quarter, up from $943 million a year ago.For the52 weeks of the

• full year, net sales increased 9.7% year over year to$ 138.4 billion from 2017 (which likewise had an additional week), the business said. Earnings for the year reached$3.13 billion, up from $2.68 billion in the previous year. Dive Insight: Costco is fueling

e-commerce sales on its own terms, making sure which merchandise is offered online and which areas get fast shipment.”We don’t see e-commerce taking over our physical,”Costco Chief Financial Officer Richard Galanti informed analysts on Thursday, according to a< a href="https://seekingalpha.com/article/4209982-costco-wholesale-corporation-cost-q4-2018-results-earnings-call-transcript?part=single"target=_ blank > records from Seeking Alpha.” We’ve likewise attempted to figure out how to do a few of the e-commerce or shipment associated activities that some members want and then we might supply cost savings too, but doing it our method. I believe there is still plenty of low-hanging fruit. And, we don’t desire to get comfy at simply shopping at Costco online, unless there is not a Costco within 100 miles. “Amidst strong rate competitors, particularly on consumer items, Costco aims to be”

usually the last to raise the rate and the very first to lower, “Galanti also said.The business‘s ability to hang on, and grow, its base of devoted members make it”amongthe top performers in all of worldwide retail, with its superior execution capability resulting in a quantitative credit profile that leads the rated retail universe,”Charlie O’Shea, v ice president at Moody’s, stated in emailed comments. On Thursday, the ratings company upgraded the Costco’s credit rating and stated its outlook”stable. “” Costco has shown the mobility of its membership/warehouse concept, with a really effective and expanding

global operation, which is an essential characteristic of an Aa retailer, augmenting its already highly-successful North American business, “O’Shea said.”Membership continues to expand, producing an annuity-stream of profits, with renewal rates remaining high even when fees areincreased, showing that the idea is still resonating with customers.”But Costco’s strong outcomes mainly satisfied expectations, and Wells Fargo experts led by Edward Kelly said the subscription retailer may be bumping against the limits of

its development.” Comps appear predestined to slow in 2019 as it cycles various internal initiatives and external tailwinds, the digital story hasn’t enhanced enough to totally unmask the long-term danger, and the long-lasting incomes growth outlook is attractive, however maybe not as amazing as the stock cost suggests.”