Costco's Revenue: U.S. vs. International

Costco's revenue per square foot -- a gauge for measuring its performance -- is higher in the U.S. than in its international stores.
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NEW YORK (

TheStreet

) --

Costco

(COST) - Get Report

, which competes with

Wal-Mart

(WMT) - Get Report

,

Best Buy

(BBY) - Get Report

,

Target

(TGT) - Get Report

and

BJ's Wholesale

(BJ) - Get Report

, is the second largest retailer in the U.S. after Wal-Mart.

It is also the largest retailer in the warehouse club category with revenues of about $70 billion in 2009. We currently have a Trefis price estimate of around $50 for Costco's stock, about 12% below the current market price of around $57.

Trefis members have created forecasts for two key drivers of Costco's stock over the last week: (1) Revenue per Square Foot for Costco International; and (2) Revenue per Square Foot for Costco U.S. The members' forecasts suggest that Revenue per Square Foot for Costco International will trend slightly below the Trefis estimate.

We estimate that Core Merchandise U.S. constitutes around 42% of the $50 Trefis price estimate for Costco's stock. In comparison, Core Merchandise International accounts for around 19%. Costco's stock is quite sensitive to (1) Revenue per Square Foot for Costco International and (2) Revenue per Square Foot for Costco U.S. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

1. Revenue per Square Foot for Costco International

The average of forecasts for Revenue per Square Foot for Costco International created by Trefis members indicated a projected increase from around $730 in 2010 to around $758 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from around $740 in 2010 to around $793 by the end of the Trefis forecast period. The member estimates imply a downside of 1% to the Trefis price estimate for Costco's stock. In the past, Revenue per Square Foot for Costco International has decreased from around $737 in 2006 to $705 in 2009.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Costco's stock to Revenue per Square Foot for Costco International.Our complete analysis for Revenue per Square Foot for Costco International is here.

2. Revenue per Square Foot for Costco U.S.

The baseline Trefis estimate projects an increase from around $818 in 2010 to around $828 by the end of the Trefis forecast period. In the past, Revenue per Square Foot for Costco U.S. has increased from around $809 in 2006 to around $814 in 2009.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Costco's stock to Revenue per Square Foot for Costco U.S.

Our complete analysis for Costco's stock is here

.

Trefis

is a financial community structured around trends, forecasts and insights related to some of the most popular stocks in the U.S.