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Jim Cramer points to Costco renewal rates and discusses a forecast bump
Costco reported US and Canadian membership renewal rates of 92.2% in its fiscal third quarter, a key signal Cramer links to pricing power.
CNBC host Jim Cramer said Costco Wholesale stands out because its scale and negotiating power support the retailer’s ability to offer lower prices, reinforcing the company’s membership model. He highlighted that membership renewal rates are an indicator of customer loyalty.
Cramer tied the discussion to what investors want to see after earnings, arguing that stock performance often depends on whether a company raises its forecast. He contrasted Costco’s setup with examples from other names, saying results can be offset when guidance or forecast expectations do not come through.
He also pointed to Costco’s valuation versus peers, noting the retailer’s forward P/E of 42 compared with Walmart at 38 and Target at 18.6. For Costco’s fiscal third quarter, he cited US and Canadian renewal rates of 92.2%.
The discussion briefly also referenced Pinterest, where Cramer linked the stock move after results to forecast expectations, noting Pinterest shares closed 8.7% lower on August 5 after the company reported second quarter earnings the prior day.