Companies that have brand-name strength continued to thrive under these current economic conditions. Pepsi (PEP) and Costco (COST) posted quarterly results that shareholders liked. Shares rose after their reports.
Pepsi traded at the $140 support level for nearly six months. PEP stock gained $10 to end last week at $150 after reporting revenue of $23.94 billion. The 2.7% Y/Y increase earned the firm $2.29 in non-GAAP earnings per share.
Management said that it would undertake cost controls without hurting its growth strategy. It will introduce innovations in its products. Customers will continue to get good value from them. This balance suggests that Pepsi remains a long-term dividend income holding for investors.
Costco bounced from the $910 level pre-earnings to trade above $940 after its Q4 report. On Sept. 25, the retailer posted comparable sales rising by 6.4%. To drive retail sales, it will open 35 new warehouses and relocate five places.
In the quarter, Costco reported that exclusive memberships accounted for 47.7% of its paid members. Those 38.7 million members accounted for 74.2% of sales. Although renewal rates fell slightly, members upgraded to get more benefits.
Expect Costco to attract a broader range of customers. Younger shoppers, for example, might seek better prices and will sign up for membership. That would increase Costco’s profit margins.
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