Costco's F1Q11 Improved Over Last Year

Citigroup has published a research report on Costco Wholesale Corporation COST after the company reported improved F1Q11 earnings results over this time last year. In the report, Citigroup writes "COST reported an improved F1Q11 versus the prior year. However, adverse economic conditions negatively impacted customer spending during the quarter and management believes the negative impact could continue. The company's sales growth and gross margin are also impacted by competition, which management characterized as “vigorous and widespread,” including other warehouse clubs, discount, department, drug, variety and specialty stores, and supermarkets, as well as internet retailers. COST repurchased $150M worth of stock in F1Q11, compared to no share repurchases in F1Q10. More specifically, the company repurchased 2.4M shares of common stock at an average price of $61.71 during the quarter. As of 11/21/10, COST had $989M remaining in its existing authorization." Citigroup maintains its Hold rating and $65 price target. Costco Wholesale Corporation closed yesterday at $72.08.