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Daily Market View Report - Tuesday, January 21, 2020

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Market View Stock Column Tuesday, January 21, 2020

Lauren’s Comments
 
Lauren is currently on vacation until January 5th. 
 
Core 40 Performance
 
Our Global Performance Investment Standard (GIPS) All Cap Dividend Growth composite (audited) through 10/31/2019 or Core 40 is up +23.07 percent with a current 12-month indicated dividend yield of 2.432 percent. (refer to GIPS presentation at Ruddinternational.com).
 
 
Millennial Performance

The Millennial is up +39.75 percent YTD with a current 12-month indicated dividend of 2.655 percent.
 
Economic Releases

PPI MoM prices increased 0.4 percent;
CPI month-over-month increased 0.1 percent;
CPI YoY currently at 2.1 percent (up-tick of 0.3);
Initial Jobless Claims decreased to 203K;
MBA mortgage applications rose 3.8 percent;
The unemployment rate is now at 3.5 percent
 
 
Earnings report – Core 40
 
COSTCO (COST US) +44.68% YTD – 

Net income for the quarter was $844 million of $1.90/share.

Net sales for the quarter were $36.24 billion or a 5.6 percent increase versus 2018 same quarter results.

Total comparable sales were 4.3 percent and ex-gas deflation along with FX of 5.0 percent.

Comparable sales for the quarter increased 3.4 percent worldwide and 3.1 percent in the US. Weakening foreign currencies relative to the US dollar negatively impacted sales by 30 bps, gasoline prices deflation impacted sales by 40 bps.

Average transaction ticket was up .90 percent for the quarter including deflationary pressures.

Membership fee income was $804 million or an increase of 6.1 percent.

Renewal rates at quarter-end were 90.9 percent for the US & Canada. The worldwide rate was 88.4 percent.

Total number of households came in at 54.7 million and total cardholders increased to 99.9 from 98.5 million.

During the quarter, Costco had three openings all in the US, a business center in Dallas, Texas and two warehouses in Connecticut and Minnesota.

Gross margin increased 30 bps on year-over-year or 11.5 percent.

Operating income for the quarter increased 11.8 percent to $1.61 billion for the year compared to $949 million for last year.

Interest expense was $2 million higher on a year-over-year basis or $38 million.

The reported tax rate for the quarter was 19.1 percent compared to 16.9 percent for the same quarter in 2018.

Costco is planning to open around 20 new units towards the end of 2020.

E-commerce came in under expectations contributing 5.5 percent for the quarter.

Lauren Rudd

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