Not good enough.

Costco Wholesale Corp. (COST) shares fell 3.3% to $161.70 in pre-market trading Friday despite the company's full-year earnings exceeding expectations.

For the year ending Sept. 3, Costco earned $5.89 per share, ahead of analysts' expected $5.77 per share. Sales of $129 billion, up almost 9% year over year, were also ahead of the consensus estimates of $128.5 billion. Same-store sales rose 3.8% in fiscal 2017. E-commerce sales, a closely watched variable after Amazon.com Inc.'s (AMZN) acquisition of Whole Foods and Walmart Stores Inc.'s (WMT)  greater push into online retail, were up 13%. 

On a call with analysts, Costco CFO Richard Galanti said the company is expanding e-commerce capabilities to other countries, driving awareness of its e-commerce site among members and experimenting with new online offerings, including free delivery in two days or less of nonperishable goods through its new Costco Delivery service. At 376 Costco locations in the U.S., with more top come by the end of next year, Costco offers same-day delivery with delivery startup Instacart. Members are loyal, and the company is "just scratching the surface" on developing its e-commerce customer base. 

"All we can do is perform," Galanti said of the Amazon-Whole Foods acquisition closing. "Our view is our value proposition got better. You read about Whole Foods having giant shopper increases in that first week--I would hope they do...We've read about the price changes, and it gives us more confidence that our value is even greater." Costco's brick-and-mortar business is "as strong as it's ever been...we feel pretty good about what we're doing."

Nonetheless, many analysts downplay the risks to Costco. Barclays analyst Karen Short, for instance, pointed out that some fear that Costco has a limited number of stock-keeping units (SKUs), and Amazon may try to close the gap. "Even if Amazon were to try to narrow the price gap on these skus, Costco would still be able to drive frequency through its service businesses such as pharmacy and optical in addition to its gas station," she wrote.

"We feel good about comps, frequency, renewal rates...we feel good about some of the things we're getting ready to offer," Galanti said, adding that the company may have to "figure out how to communicate" its low prices to customers who may be spending more at Amazon or other competitors. "I think we're going to keep taking pieces of" brick-and-mortar sales, he added, citing Costco's continued strength in apparel sales even amid a wave of brick-and-mortar retail bankruptcies. Its unique items, including Kirkland private label brand, will also drive customers, he said.

Next year, Costco plans to open 25 net new stores, about two-thirds of which will be located in the United States. 

Costco shares are up 4.35% year to date, while the S&P 500 is up 13.35% during the same period. 

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