Costco Reports Strong Q1, Plans 33 New Locations

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Costco Reports Strong Q1 Earnings, Plans for Expansion (Read More)

Chicken Bake Update: Longtime CEO Craig Jelinek to step down on Jan. 1, 2024, and be succeeded by Ron Vachris, current COO and president.

• Net Income: Q1 net income of $1.58 billion, $3.58 per share, up from $1.36 billion, $3.07 per share, YoY.

• Revenue: Net sales increase of 6.1% to $56.72 billion, beating expectations.

• Comp Sales: Total company comparative sales up 3.8%, with U.S. comp sales up 2% and other international comp sales up 11.2%.

• E-commerce: E-commerce comps increase by 6.3%.

• Membership Fees: Q1 membership fees total $1.082 billion, up from $1 billion YoY, with 129.5 million cardholders.

• Dividend: Board declares special cash dividend of $15 per share, totaling approximately $6.7 billion.

• Expansion: Plans to open 33 new locations

🧠 EDITOR’S THOUGHTS

Investing in Costco NNN properties, whether through ground leases or NNN leases, presents a compelling opportunity for stable and predictable income. Costco's status as a premier warehouse retailer significantly diminishes the chances of vacancies or lease defaults, ensuring a dependable stream of revenue for property owners. Their strong brand and expansive customer base solidify consistent foot traffic, reinforcing the property's value. Location List Here

📝 COSTCO CHEAT SHEET

• Average Price Point: $30M - $36M

• Average Cap Rate: 4.00% - 5.00%

• Lease Type: Absolute NNN or Ground Lease

• Rent Increases: 5% in Options

• Base Term: 25 Years plus Two 5-Year Options

• Average Rent: $1,200,000

• Lot Size Requirement: 13 Acres

• Building Size: 150,000 SF

TRIPLE NET TENDIES

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NET LEASE NUGGIES

• American Freight introduces new store experience amid expansion. The furniture retailer has unveiled a fresh store format in its Denver-based locations, with plans to test the concept in more locations before a nationwide rollout later in 2024. The upgraded experience includes improved product information, a more spacious layout, a visualizing tool using AR technology, and delivery and installation services. American Freight recently opened stores in Pueblo, Colorado Springs, and Westminster as part of its growing presence in Colorado. (Read More)

• Perkins expands in Missouri with three-unit deal. Perkins Restaurant and Bakery, under the ownership of Ascent Hospitality Management, plans to rebound from its 2019 bankruptcy filing with nationwide growth. Franchisees Michael and Cherie Cook signed a franchise agreement to open three Perkins locations in Missouri, starting with a unit in early 2025. The Cooks, experienced franchisees with a portfolio of restaurants, decided to bring Perkins back to their community, citing the family-friendly atmosphere and home-style cooking as their motivation. This expansion is part of Ascent's larger effort to grow the brand and implement new strategies for success. (Read More)

• Shake Shack Opens First Drive-Thru in Southern Nevada - Shake Shack opened its fifth location and first drive-thru in Southern Nevada, offering in-Shack dining as well as a two-lane drive-thru with a separate pick-up window for convenience. Digital pre-ordering for pickup or delivery will be available soon. (Read More)

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