Costco Wholesale Stock Reacts to Latest News - What's Happening?

Costco Wholesale Corporation has announced a significant change in its leadership, with Richard Galanti, the current Chief Financial Officer (CFO), set to step down from his position effective March 15, 2024. The company's board of directors has named Gary Millerchip as the new CFO, effective the same date.

Gary Millerchip brings a wealth of experience in retail and finance to his new role at Costco, having previously served as the Senior Vice President and CFO at The Kroger Co. since April 2019. Prior to his time at Kroger, Millerchip spent over 20 years in banking, with his most recent role at the NatWest Group (formerly Royal Bank of Scotland) in the U.K.

Expressing gratitude for Galanti's contributions, Costco's Chief Executive Officer Ron Vachris stated, "Over his nearly forty-year tenure as chief financial officer at the company, Richard has made innumerable and invaluable contributions to its success. He is widely known, admired, and respected among our shareholders, employees, business partners, and others. We express our deepest gratitude for his long and loyal service."

Galanti will continue to serve in an advisory role until January 2025, assisting in the transition and maintaining a position on the board of directors.

Regarding the company's current operations, Costco currently operates 874 warehouses worldwide, including locations in the United States, Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, and Sweden. Additionally, Costco operates e-commerce sites in several countries.

In the wake of this announcement, Costco's shares have experienced a marginal movement, declining by 0.1% and reaching a trading price of $723.4.

The company's full 8-K submission is available here.

2018 2019 2020 2021 2022 2023
Revenue (MM) $141,576 $152,703 $166,761 $87,977 $102,267 $242,290
Revenue Growth n/a 7.86% 9.21% -47.24% 16.24% 136.92%
Operating Margins 3% 3% 3% 3% 3% 3%
Net Margins 2% 2% 2% 2% 3% 3%
Net Income (MM) $3,134 $3,659 $4,002 $2,117 $2,623 $6,292
Net Interest Expense (MM) $159 $150 $160 $79 $75 -$160
Depreciation & Amort. (MM) $679 $683 $1,645 $2,601 $2,768 $2,077
Earnings Per Share $7.09 $8.26 $9.02 $4.76 $5.9 $14.16
EPS Growth n/a 16.5% 9.2% -47.23% 23.95% 140.0%
Diluted Shares (MM) 443 444 444 445 445 444
Free Cash Flow (MM) $6,561 $6,997 $8,772 $6,589 $5,382 $6,745
Capital Expenditures (MM) $1,328 $1,317 $2,810 $5,054 $5,669 $4,323
Current Ratio 1.02 1.01 0.98 1.02 1.03 1.09
Total Debt (MM) $13,001 $11,957 $15,186 $14,196 $13,102 $10,754
Net Debt / EBITDA 1.21 0.54 0.23 0.27 0.36 -0.61

Costco Wholesale has rapidly growing revenues and increasing reinvestment in the business, a strong EPS growth trend, and healthy leverage levels. However, the firm has weak operating margins with a stable trend. Finally, we note that Costco Wholesale has positive cash flows and just enough current assets to cover current liabilities, as shown by its current ratio of 1.09.

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