Costco Wholesale (COST) plans to extend US club hours exclusively for its executive members, a long-term positive step to expand capacity and ease overcrowding at select locations, Oppenheimer said Tuesday in a report.
"We look favorably upon this development," Oppenheimer said. "We would have preferred this change for all members to minimize the [profit and loss] headwind and to reduce potential friction at store opening."
New Chief Executive Officer Ron Vachris seeks to maintain a competitive edge the membership rivalry with Walmart's (WMT) Walmart+ and Target's (TGT) Target Circle 360, the report said.
The cost increase tied to expanded hours is expected to create a near-term earnings headwind through fiscal years 2025 and 2026 with a tailwind anticipated by 2027, the report said.
Oppenheimer has an outperform rating on Costco with a price target of $1,130.
Price: 994.38, Change: -10.11, Percent Change: -1.01
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.