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Costco (COST) Earnings Beat Estimates - YouTube
Channel: TD Ameritrade Network
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let's talk about costco earnings the 360
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round is ready and we have some great
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guests with us kim forest founder chief
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investment officer at boca capital
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partners and fred reichfield held a bain
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cat bane and company and also a fellow
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there an author whose new book winning
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on purpose the unbeatable strategy of
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loving customers is available now
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fred there's your book
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congratulations on that i hope you do
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very well with that we're glad to show
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it for you okay let's get to all about
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costco so kim i'll start with you costco
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is having an incredible day right so
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it's up four five percent it's having
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its best day in since last april until
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april 2020 i mean kim
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so it's all because of good earnings and
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i guess good enough uh forecasts looking
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forward to drive people into the arms of
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uh buying costco and i i think that's
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right uh there was a lot of concern
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around whether or not they could get the
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products they need off of boats um
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on the west coast and into their
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warehouses and it did look like the
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company reported that it was really
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tough but they did it
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looking for this quarter though i the
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company did warn that some of their
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products may not come in until after
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christmas so the question to um
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investors is this do you think it's
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going to affect the overall quarters
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sales and today it looks like the
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investors are saying no it won't affect
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the overall quarter for the customer or
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for costco
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okay all right and fred fred reich held
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you are looking also about customer
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satisfaction and you think that's a good
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thing for costco tell us more about that
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costco is one of those very special
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companies there are only 10 of the
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companies in the world who believe
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customers are the primary stakeholder
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that their primary duty is to enrich
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customer lives costco is one of those
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and they are among the companies that i
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invest in buy and hold and i've tripled
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the market over the last decade
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that kind of performance doesn't come
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from following little short-term
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jibs and jabs it means always acting in
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the customer's best interest and and it
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has served them so well and i think as
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long as they stay on that path they
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represent one of the great companies
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would you still add fred to your
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holdings year after year
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i do i mean i
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jim senegal the founder went through his
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philosophy with me about a year ago
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and they are still healing to that path
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they a they exist for their members
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they have a profit a business model that
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makes its targets simply through their
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membership fees so they can then
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dedicate all of their innovation their
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creativity their energy to making
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customers lives better it's brilliant
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best place to work in retailing
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yeah
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what else could you want
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yeah yeah now i see what you're saying
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kim you know i was uh
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listening to an analyst who was looking
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at multiples and noting things like bjs
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that had half the multiple ulta that had
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makeup and still had a lot of high
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margins and growth patterns going
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forward what does that mean to you when
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you look at costco and you see the net
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sales and same store sales on the rise
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but the outlook for 2022 and beyond
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well i i agree with jim that having a
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good product and in this case selling to
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products that customers want is what
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they do i think that's brilliant
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um i also looked at the growth in free
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cash flow and that says they love their
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shareholders as well they might love
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their customers and their employees but
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they're showing the love with generating
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that so i think that looks very well for
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the company now in this first quarter
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i'm guessing that some sales will slip
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because you know they're just not going
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to have products for christmas and i'm
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not a believer that if somebody didn't
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get
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you know a new ipad or maybe not an ipad
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but some kind of electronic widget that
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you'd buy at costco for the holiday but
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you're going to go back in january and
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buy it i i don't believe that but um
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any dip in price that this company might
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have i agree with your other guests that
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you should seriously look at it
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and because it does seem to put cli um
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not just customers but shareholders high
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on its list of who it thinks is
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important and i really like that
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and then okay so that's you're making a
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good point there kim and then fred as we
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take a look at something the membership
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fees and there's been talk of the
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steeple analysts announcing
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that he believes costco will announce a
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membership the increase of roughly eight
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percent maybe over the next 12 months so
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is this okay does this just bring in a
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higher end chopper does this uh filter
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out some folks maybe it's not so great
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what are your thoughts if they because
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they're made they're making money on the
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membership fees 946 million we're
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showing it right now
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fred
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i don't know the answer to that specific
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question but i'll tell you how you'll
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figure out the answer i invented a
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metric called the net promoter score
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that
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most of the world now uses and at bain
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and company we measure net promoter
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score for competitors across the
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industry
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as a science because we know the company
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with the highest net promoter score is
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the one that has customer love and is
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going to power through the ups and downs
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of each quarter
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right now costco is the highest net
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promoter score in all of the retailing
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sector
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if that nps which is how much their
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customers love them how much they'd
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recommend them to a friend if that
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remains at the top
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i'm a buyer every quarter going forward
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i see what you're saying well it's great
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to see you both my net promoter score
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for the two of you is top notch the best
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it could be thank you both very very
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much it was great to see it
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yeah oh 10 okay i didn't know what the
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the parameters were it is great to see
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you both i really appreciate it a great
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break down there and a look at costco
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which has obviously had a nice run kim
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forrest of boca capital partners and
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fred reich held bain and company thank
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you both very very much we'll continue
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to watch costco which we said today is
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um on the move with the largest percent
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increase since april of 2020 so we'll
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watch that one and a lot of overweight
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ratings folks right i saw wells fargo
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600 uh
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also deutsche bank 482 and jpmorgan 560.
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so you did have some of the analysts
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jumping on board thank you
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you
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