Purchasing shares of Costco stock is a great way to invest in one of the largest retailers in the world. The company operates several stores around the country and is known for its high-quality merchandise and services. However, there are a few things to keep in mind before you make a purchase.
Casey’s General Stores
In 16 Midwestern states, Casey’s General Stores operates over 2,400 convenience and grocery stores. The company is owned by a private equity firm called Axiom Ventures, which has invested $1.7 billion over the last five years.
The company operates from three distribution centers and has about 2,000 retail locations across the country. The company offers many food items, ranging from donuts to gas station staples. The company also operates a rewards program in which customers can earn fuel discounts and freebies for completing specific tasks. The company also offers a mobile app designed to help customers locate stores near their homes.
Despite the company’s solid performance, analysts predict a down year for the chain. As of press time, the company’s stocks have lost 3 percent of their value. The company will release its fiscal second-quarter results before Tuesday’s market openingThe budgetary year ended in December, and management expects to post a modest increase in sales compared to the previous year.
Kirkland
Buying Kirkland stock at Costco is an excellent way to bargain on groceries. The retailer has been selling the Kirkland Signature brand for decades. A wide range of products is in the line, including bacon, paper goods, and even organic grass-fed beef. The products have a distinctive black, red, and white design.
While the Kirkland Signature brand isn’t available at Walmart, it is sold at Costco. It has become one of the largest consumer packaged goods brands in the U.S. There are more than 9,000 active products in Kirkland’s catalog. Its sales have increased over the last few years, resulting in a buy rating from Wall Street research analysts.
Its product lines are expected to help boost Costco’s net income to $1 billion in 2021. It is also a good way for the retailer to solidify its image as a quality store.
While the majority of the Kirkland Signature products are manufactured by well-known companies, there are a few that smaller manufacturers make. These companies include Duracell, Reynolds, and Bumblebee.
Operating segments
During the fiscal year ending September 30, 2018, Costco’s operating segments grew. The largest segment, Foods, and Sundries generated net sales of 77.3 billion U.S. dollars. The second largest segment, Ancillary, generated $22.6 billion in net sales. The third largest part, Softlines, included businesses such as optical dispensing centers and hearing-aid centers.
The company also expanded its e-commerce presence. Its e-commerce websites, as well as its app, continue to add new features to meet customer needs. Its e-commerce operations accounted for approximately 2% of its total revenue.
In addition to its e-commerce operations, Costco operates a network of warehouses in the United States and overseas. The company operated eighty-three warehouses in the U.S. in 2018. It also has warehouses in eleven international countries. In Canada, it operated 100 warehouses. In Japan, it worked 29 warehouses.
Costco has a large merchandise mix and offers excellent prices. Its low prices and variety of products attract a large number of customers. Its products are sold in various categories, including apparel, home and garden items, and small appliances.
Share-price decline compared to Lululemon.
During the last two months, Lululemon Athletica shares have dropped 18%. However, the company has beaten Wall Street’s expectations.
Lululemon posted strong revenue growth in September, and the company’s direct-to-consumer sales grew by 31%. The company also opened 11 new warehouses. These expansions should lay the foundation for more robust long-term revenue growth. But investors should keep an eye on inventory levels. Lululemon’s management said the company is comfortable with unsold goods.
The company’s third-quarter net income rose by 33 percent to $2.20 a share, while its adjusted earnings per share increased by 47 cents. Lululemon had earlier forecast adjusted earnings between $4.20 and $4.30.
Lululemon Athletica has a strong brand and expects to produce robust earnings in the next few quarters. But the company warned that its sales would be lower than analysts’ estimates in the fourth quarter.
The company said it sees same-store sales in the low- to mid-single digits for the December period. Lululemon had previously forecast comparable sales in the come year’s on- to the mid-single-digit range.
