COST (Trans): Confident on inflation; plans to open 30 warehouses annually.

Below is Dolphin Research's full earnings call Trans for $Costco Wholesale(COST.US) FY26 Q1. For our First Take, see 'US Gov. shutdown victim? Is Costco's last leg down?'1) Key metrics recap. Headline results: net income of $2.001bn and diluted EPS of $4.50.Excluding tax benefits related to SBC, net income and EPS rose 13.6% YoY. Sales: net sales were $65.98bn (+8.2% YoY), with comps up 6.4%...

US Gov. Shutdown Casualty? COST's Last Dip?

The global discount retail leader — $Costco Wholesale(COST.US) — reported FY2026 Q1 results for the quarter ended Nov 23 after the U.S. close on Dec 11.Overall performance was steady, with revenue and OP growth improving and slightly beating estimates.However, key operating metrics — comps/traffic growth and member additions/renewal rates — remained soft.Specifically:1) Same-store growth looks better, but traffic is still weakening.Overall comps rose 6.4% this quarter, an acceleration of 70bps vs. last quarter...

COST 1QFY26 First Take: Overall results remained solid.Top-line and OP YoY growth edged up QoQ and slightly beat consensus, a clear bright spot.However, same-store traffic growth continued to slow and missed expectations.The better sales and financials appear entirely driven by a higher average ticket.New member additions slowed, and renewal rates kept declining.These remain negative signals.Details follow.Key points below.1) Revenue grew 8.3%, a modest acceleration vs. last quarter and above expectations.Driven by a 3.2% increase in average ticket on comps (vs. 1.9% prior), which pushed comparable sales growth from 5.7% to 6.4%.2) That said, traffic growth on comps fell from 3.7% to 3.5%, missing the Street.As a result, ex-FX and gas, comps were 6.4%, flat QoQ with no real improvement.3) On member metrics, net new paid members were +0.4 mn QoQ, the smallest quarterly add since 2019.Global and North America renewal rates fell another 10bps QoQ, down 80bps cumulatively over the past three quarters.4) On a slightly positive note, the SG&A ratio did not widen meaningfully, up just 1bp YoY, while GPM increased 4bps YoY.This helped OP growth return to double digits at 12.2% YoY.$Costco Wholesale(COST.US)

Li Auto 3Q25 Quick Interpretation: Dolphin Research's first glance at Li Auto's financial report can only be described as 'unbearable to look at,' with a significant drop in gross margin and net profit turning from a gain to a loss.However, upon closer examination, it was found that the main culprit behind Li Auto's 'unbearable' quarterly financial report was the Mega recall event, which had a negative impact on the cost side, amounting to nearly 1.11 billion yuan. After accounting for the impact of this one-time event, Li Auto's 'real' gross profit for the third quarter was 5.58 billion yuan, with an overall gross margin of 20.4%. Both overall revenue and gross margin slightly exceeded market expectations. Therefore, excluding the impact of the Mega recall, the overall performance of the third-quarter financial report slightly exceeded market expectations.Specifically:Third-quarter vehicle sales revenue was 25.87 billion yuan, exceeding the expected 25 billion yuan. This was mainly due to the high prices of the i8 and Mega pure electric models, which raised the average selling price to 277,000 yuan, surpassing the market expectation of 266,000 yuan.Excluding the negative impact of the Mega recall on the cost side, the vehicle sales gross margin for this quarter was 19.8%, up about 0.4 percentage points from 19.4% in the previous quarter. This performance was still acceptable, mainly due to the increase in the average selling price of vehicles, which offset the negative impact of the increase in per-vehicle amortized costs due to a quarter-on-quarter decline in sales volume.Finally, driven by the quarter-on-quarter increase in the 'real' gross margin, although R&D expenses continued to increase, the 'real' net profit after excluding the impact of the Mega recall was 490 million yuan, slightly exceeding the market expectation of 320 million yuan.However, Dolphin Research needs to remind that compared to the third-quarter performance itself, the market will be more concerned about the fourth-quarter guidance, and Li Auto's fourth-quarter guidance does not meet expectations.According to the guidance, fourth-quarter sales guidance is only 100,000-110,000 units. Given that October sales were 32,000 units, the implied average monthly sales for November/December are only 34,000-39,000 units, significantly lower than the market expectation of 138,000 units. This indicates that the ramp-up speed of the i6, a popular model, is below expectations. More importantly, it implies that the sales of the L series extended-range models will decline significantly quarter-on-quarter compared to the third quarter, especially as Li Auto continues to increase discounts on the L series. The 'internal and external troubles' of the L series are more severe than expected.With the i6 launching at a low price and the L series increasing discounts but still experiencing a significant quarter-on-quarter decline in sales, Li Auto's fourth-quarter vehicle sales gross margin is expected to remain under significant pressure. The specific outcome will depend on the guidance from the management. $Li Auto(LI.US) $LI AUTO-W(02015.HK)

Nio: Cost Reduction and Efficiency Improvement Are Effective, But Is It Really a 'Turnaround'?

Fourth quarter guidance below expectations