Costco share price is again set at $ 300
Costco (NASDAQ: COT) the share price has risen sharply over the past two years. Shares have jumped 40% since the start of this year, extending the three-year rally to 90%.
The bullish momentum was supported by improving financial numbers as well as aggressive growth strategies.
Its fourth quarter and full year 2019 financial results highlight this trend. The company’s fourth-quarter revenue of $ 43 billion was up 7% from a year ago. Turnover for the full year increased by 8% compared to the previous year.
Membership and store growth add to revenue growth
Its active members at the end of the fourth quarter stood at 53.9 million. This represents an increase from 53.1 million household members over the past year. The total number of cardholders was around 98.5 million in the fourth quarter. This is an increase from 97.2 million cardholders in the previous quarter.
The company has also expanded its footprints in global markets to improve its revenue base. He opened 10 stores in the fourth quarter. The store opening includes eight in the United States, the first warehouse in China and one in the United Kingdom.
Costco currently operates 783 warehouses. It has 544 warehouses in the United States, 29 in the United Kingdom, 100 in Canada, 39 in Mexico, 26 in Japan, 13 in Taiwan, 16 in Korea and 11 in Australia.
Higher potential earnings support investor sentiment
The business has the potential to convert revenue growth into big profits. The company generated net earnings of $ 2.47 per diluted share in the fourth quarter. This is an increase from $ 2.36 per diluted share during the period last year.
Earnings per share for the full year were $ 8.26, up significantly from $ 7.09 per share the year before. Along with investing in high margin areas, Costco’s strategy of reducing outstanding shares supports earnings growth. He bought 247 million shares in fiscal 2019.
Overall, there are several catalysts supporting the momentum in Costco’s stock price. Its shares are expected to extend the uptrend as the company expects similar financial growth next year.