Despite analyst expectations, Costco posted profit earnings of $312 million for its first fiscal quarter. Up 71 cents per share from 60 cents per share from the same quarter last year, Costco’s sales rose to $18.8 billion. In other news, Home Depot is expecting an earnings per share rise of 27% for fiscal 2010.
The Home Depot shared some key planning and financial insights to the business community during the December Investor and Analyst Conference. Among key points highlighted were the company’s projected sales increase for 2011, its plan to open 10 new stores, and its interconnecting retail plan for the New Year. New retail locations will be opening up in Mexico, Canada and the United States. The company also will be rolling out a new mobile application to help customers shop online more efficiently.
A recent new survey of 95 U.S retailers shows the impatience growing for a lack of consumer sales of eco-friendly products. In response, retailers are now pursuing their own sustainable efforts to increase energy efficiency within their stores. The report also highlights a willingness of companies to educate their customers to invest in more environmentally friendly products.
Costco outperformed expectations on Wednesday, posting a higher quarterly profit than what was originally predicted by financial analysts. Despite the belief that tougher comparisons would slow down sales during the holiday season, the company’s sales growth continued to build momentum as the quarter progressed, due in part to strong sales and increased revenue fee. Analysts attribute the better-than-expected results from the improvements in the California market, which is responsible for more than a quarter of Costco’s sales.
Sam’s Club is offering their customers a new home and business installation service. Third party vendors will be available to help deliver, assemble and/or install items purchased from more than one of the company’s 600 stores nationwide. The new service is meant to simplify the delivery and set up process for its customers. Senior director, Mike Swatsworth, recently expressed the notion that customers should enjoy their purchases without having to endure the hassle of installing products themselves during the holiday season.
Home Depot is expecting both sales and profits to rise next year due in part to the retail conglomerate’s plan to open 10 new stores. The expectation is that sales will grow by over 2% while its operating margin will improve by 30 to 40 percentage points. Earnings per share are also expected to rise from its continued operations growth before share repurchases to somewhere in between 7% to 9%.
DIY modelers and general contractors in 2010 are preaching one theme; and that is to upgrade conservatively to one’s fixed investment. However, based on 3Q earnings calls and investor presentations, Home Depot and Lowe’s are forecasting bullish internal opportunities for a percentage earnings growth in the double digits. These opportunities revolve around several factors including customer service, improved merchandising and the utilization of technology to help streamline operating functions.
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