My Bulwark Crumbles-Costco Earnings Review
It may be a bit dramatic to call Costco my “bulwark,” and it is definitely a bit dramatic to say that they “crumble[d]”, but both statements convey the pessimism I felt as I watched the red number in my portfolio grow throughout the day. I really needed Costco to hit on their earnings, not just because they make up over 20% of my portfolio, but because it has been a rough few days markets-wise, and GigaCloud Technology has run me through with a sword. Costco missed, which is always a bit surprising, but I never should have expected much, their valuation indicates as much. In this article, we’ll review these earnings, but to save you some time: BUY COSTCO STOCK.
Here are the important numbers. Costco made a gross profit of $1.79 billion, beating estimates, and up 3% y/y. Their revenue was $62.5 when investors were expecting $63.1, but that is still revenue growth of 9% y/y, which is pretty great for a company of Costco’s size. One of the key numbers in Costco’s reports, same-store sales, grew 6.8% in just this quarter, beating the 6.4% expected.
And that’s it. Based on those numbers, the stock slid 7%, which is wild. If that reaction does not disprove the efficient-market hypothesis, I don’t know what does. My econ teacher was quite proud that he knew what that was, and his subscription to the theory reinforced my belief that he was completely lacking in understanding of financial markets. Similarly, anybody who thinks that Costco stock should not be bought at this level is insane.
Costco is protected from tariffs via its hyper-flexible supply chain, and its upper-middle class demo. You either want to be in the richest of the rich or the upper of the middle class when you are a consumer-facing company. Costco is the upper-middle class store, and they will be sheltered from tariffs by their demo. Their prices are already so low anyway. If other stores are more expensive, the chances that consumers pull the trigger and get a Costco membership increase. But really, I don’t even have to justify these earnings. Who cares about these earnings? Revenue growth of 9% y/y is great for a company Costco’s size, and for a brick-and-mortar warehouse store like them in particular.
I continue to be incredibly impressed with Costco’s growth, and I can virtually guarantee you that if you buy their stock now, your money will have grown between 10%-15% in 12 months.
Because we knocked that out a little early, and you’re still reading, it’s time to introduce “Henry’s Politics Corner!!!”
I know I have said many times that this should not be political because it does not matter to you what my politics are, but screw past-Henry, I need to get this off my chest. Democrats are really making me mad.
Technically, I am a Democrat, but oh my sweet Lord they are angering me. Obviously, there is not much they can do, since the Dems do not control any branch of the Government (whose fault is that?) but this incessant whining infuriates me. They refuse to do anything, just roll in the dirt and complain, doing pointless crap that does not matter. They are SO WEAK, and they cannot stop getting distracted by pointless stuff. Who cares about Al Green (somehow the second most famous Al Green) talking during Trump’s speech? Is this really all they have?
And it’s not even the lack of action, it’s the complete lack of unified direction. At least the Republicans have a banner to follow, the Democrats are just children who completely miss the larger picture constantly. They refuse to leave their bubbles and compromise when it makes sense. Again and again they pick the wrong battles while being completely unable to formulate a coherent message. Kamala Harris’s campaign was so shit. Joe Biden refusing to leave the race was a disgrace. And the air of cowardice that constantly surrounds the Dems will continually force failure out of them when victory is most needed.
Go ahead, elevate AOC to a position of power. If the party moves left, then when they call Kamala Harris (who was trying to run as a Republican) a Communist, nobody will listen. STOP TRYING TO RUN TO THE CENTER. None of you are charismatic enough to be the man/woman of the people. In fact, listening to most of you makes me want to immigrate to Argentina.
Listening to MSNBC (my mom’s (love you)) favorite cable news channel every night drives me insane. Reading the Daily Beast headlines (IK that they’re supposed to be more moderate now) or the Huffington Post makes me want to kill myself. And hearing any Democratic operative say something along the lines of “We were doomed to lose” drives me to do something extremely violent every time.
They just fucking suck.
And again, I am a Democrat. I was part of the Burke County Teen Dems, I really wanted to see Kamala Harris win, and Donald Trump drives me up the wall with his mind-boggling level of stupidity. But the simple stupidity of the Republicans borders on preferability when compared to the inane and deeply flawed Democratic Party.
Except for Roy Cooper, #GOAT.
And I’m not really serious, obviously I’ll always go blue compared to this Republican party. But more and more I have become disillusioned with the feeble Democrats, and their feeble supporters. The party is so sick, and I would love to see someone else replace them.
