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Slipping Margins a Worry for Costco Wholesale Corporation (COST)

By U.S. News & World Report

Not even Costco Wholesale Corporation (Nasdaq: COST) could escape the difficult U.S. retail sales environment in the most recent quarter.

Despite a relatively strong performance throughout most of the year, investors were disappointed with Costco’s shrinking fiscal fourth-quarter margins.

Costco stock was down more than 6 percent on Friday, a day after the company reported quarterly earnings per share of $2.08 on revenue of $42.3 billion. Both numbers topped consensus analyst expectations of $2.02 and $41.5 billion, respectively.

Membership fees were up 13 percent on the quarter. Comparable-store sales were up 5.7 percent, ahead of analyst forecasts of 5.1 percent growth.

However, Costo reported a 15 basis point decline in gross margins, a number that did little to quell investor concerns about pricing pressures in the grocery business. Amazon.com ( AMZN) officially took control of grocery chain Whole Foods in August and immediately began lowering prices to put pressure on competitors.

[See: 9 Best ETFs for Retail Power.]

Costco is now expanding its home delivery service in an effort to keep pace with Amazon. Earlier this week, Wal-Mart Stores ( WMT) acquired logistics startup Parcel in an effort to expand same-day delivery in New York City.

Although Costco’s stock opened Friday’s session down, Wall Street analysts seem to think investors are overreacting to what was mostly a positive quarter.

“Although long-term uncertainties such as renewal rates from the recent membership fee price increase and the threat from Amazon remain a watchpoint, we maintain our ‘buy’ rating as current valuation provides modest downside protection,” Stifel analyst Mark Astrachan says.

Citi analyst Kate McShane is also keeping her “buy” rating for Costco stock and says the company has a number of competitive advantages that should insulate it from the competition.

“COST remains well-positioned to withstand competition given its low prices, experience in the grocery industry, the ‘treasure hunt’ aspect of shopping, COST’s ability to act as a one-stop shop for households, the draw of its ancillary businesses that cannot be replicated online, and its geographic diversification,” McShane says.

[See: 8 Luxury Retail Stocks Worth a Look.]

In addition to the “buy” rating, Stifel has a $173 price target for Costco stock.

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Slipping Margins a Worry for Costco Wholesale Corporation (COST) originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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