One Reason Costco (COST) Stock Closed Up Today
NEW YORK (TheStreet) -- Costco (COST) - Get Report stock closed up by 0.82% to $157.55 on Friday afternoon, after the company reported its October sales figures.
On Wednesday, Costco reported sales of $8.78 billion for the month of October, an increase of 1% year-over-year.
Comparable sales, however, showed a loss of 1% last month.
Weather-related apparel weakness could be the culprit of the loss, JPMorgan said in an analyst note today, Barron's reports.
"While we are not too worried about Costco and expect trends to recover, this will definitely add more fear broadly for our coverage heading into earnings with a weak October from the mother of consistency (Costco) and tough November comp ahead with the weather headwind unabated," JPMorgan continued.
Separately, TheStreet Ratings team rates COSTCO WHOLESALE CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
We rate COSTCO WHOLESALE CORP (COST) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- COST's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 0.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- COSTCO WHOLESALE CORP has improved earnings per share by 9.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COSTCO WHOLESALE CORP increased its bottom line by earning $5.37 versus $4.66 in the prior year. This year, the market expects an improvement in earnings ($5.65 versus $5.37).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. The net income increased by 10.0% when compared to the same quarter one year prior, going from $697.00 million to $767.00 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Food & Staples Retailing industry and the overall market, COSTCO WHOLESALE CORP's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $1,028.00 million or 22.09% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.40%.
- You can view the full analysis from the report here: COST
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.