Costco Wholesale ‘s first quarter of its fiscal year 2024 came in better than expected, with beats on both the top and bottom lines. The results further demonstrated how the company shines in a challenging macroeconomic environment, with many other retailers under pressure from a weakening consumer, bloated inventory levels and theft. Furthermore, we were pleased to see Costco reward its shareholder base with a special cash dividend of $15 per share. Total revenue for the three months ended Nov. 26 increased 6.2% year-over-year, to $57.8 billion, beating analysts’ expectations of $57.72 billion, according to estimates compiled by LSEG. Earnings per share (EPS) grew 16.6% year-over-year, to $3.58, beating analysts’ forecasts of $3.42, LSEG estimates showed. Shares of Costco were up roughly 1.6% in afterhours trading, at $641.35 apiece. Based on Thursday’s closing price of $630.78 a share, Costco stock has gained 38% year-to-date and trades near its all-time closing high of $642 made Wednesday. Bottom line This was another great quarter from Costco and we see no reason to change our view that you can’t go wrong owning this stock for the long term. It’s easily the most consistent performer in a volatile retail group because of its leadership in selling quality goods at value prices, which drives people to sign up for new memberships and spend more in its stores. The power of the Costco model is evident by its strong loyalty rates. The announcement of a special dividend was a bonus this evening and an event we’ve been counting on for a while. Anticipation of a membership-fee increase, which might come next year, could push the stock to higher levels from here. However, we are keeping our 2 rating on the stock — meaning we would wait for a pullback before buying up more shares — because it has had a huge run this year to new highs, and is likely to pause in order to digest those gains. Due to the Federal Reserve’s dovish pivot on Wednesday, investors have…
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