Costco (COST) reported both falling earning and sales for its latest fiscal fourth quarter earnings. Still, fourth quarter earnings of $0.85 per share beat expectations of $0.77.
Fiscal 2009 net sales fell 2% and earnings per share were $2.47. This puts Costco at a historical PE of 23x these reported earnings and 21x consensus 2010 earnings. Note the stock has had quite a rally since July.
Whether or not Costco as a stock is cheap right now, the earnings provided positive indications about the broader economy.
Despite the full year’s reported revenue, Costco’s highlighted that most recent sales, during the five-week period ending October 4th, rose 4% on a comparable basis excluding fuel and currency effects.
This is an acceleration from August’s 2% growth. Thus for Costco, retail demand has picked up, and in this economy, this kind of top-line growth must be considered awesome.