Key Takeaways
- Costco (COST) and Broadcom (AVGO) both reported strong quarterly earnings that surpassed analyst expectations, with Broadcom also providing an optimistic Q1 revenue outlook.
- Lululemon (LULU) delivered a Q3 earnings beat on revenue and EPS, but its Q4 guidance fell below estimates, overshadowed by the announcement of CEO Calvin McDonald's departure.
- U.S. equity markets closed mixed, with the Dow Jones Industrial Average surging over 650 points (1.35%), while the Nasdaq Composite saw a slight decline of 0.28%.
- The Federal Reserve Board reappointed its Bank Presidents and First Vice Presidents for new five-year terms, signaling continuity in leadership.
Major U.S. companies Costco (COST), Broadcom (AVGO), and Lululemon (LULU) released their latest quarterly earnings reports today, presenting a mixed picture for investors. While Costco and Broadcom delivered strong results exceeding analyst expectations, Lululemon reported a beat on Q3 but issued a cautious Q4 outlook and announced a significant leadership change. Meanwhile, U.S. equity markets ended the day with varied performance.
Strong Performance from Costco and Broadcom
Wholesale giant Costco (COST) reported a robust first quarter, with earnings per share (EPS) of $4.50, comfortably beating the estimated $4.28. Total revenue also surpassed forecasts, reaching $67.31 billion against an estimate of $67.07 billion. The company's comparable sales, including gas and foreign exchange, rose 6.4%, exceeding the 5.84% estimate, demonstrating solid growth.
Similarly, semiconductor and infrastructure software company Broadcom (AVGO) posted strong fourth-quarter results. Adjusted net revenue came in at $18.02 billion, higher than the $17.47 billion estimate. Its semiconductor solutions revenue reached $11.07 billion, beating the $10.74 billion estimate. Adjusted EPS was $1.95, surpassing the $1.87 consensus. Looking ahead, Broadcom anticipates first-quarter revenue of approximately $19.1 billion, exceeding the estimated $18.48 billion, signaling continued momentum.
Lululemon's Mixed Bag: Beat on Q3, Soft Q4 Guidance, and CEO Transition
Athletic apparel retailer Lululemon (LULU) announced third-quarter earnings that largely beat expectations, but its forward guidance and a leadership change introduced uncertainty. The company reported net revenue of $2.57 billion, topping the $2.48 billion estimate, and EPS of $2.59, significantly higher than the $2.22 forecast. Gross margin also showed strength at 55.6%, beating estimates.
International comparable sales surged 18%, outperforming expectations. However, comparable sales in the Americas declined 5%, missing estimates. For the fourth quarter, Lululemon projects net revenue between $3.50 billion and $3.59 billion, with EPS between $4.66 and $4.76. Both figures came in below the consensus estimates of $3.59 billion for revenue and $4.97 for EPS. Adding to the news, CEO Calvin McDonald is set to step down, with a succession plan actively underway.
Market Performance and Economic Calendar
U.S. equity markets concluded the trading day with a mixed performance. The Dow Jones Industrial Average saw a significant gain, closing up 650.12 points (1.35%) at 48,707.87. In contrast, the Nasdaq Composite experienced a slight dip, closing down 65.89 points (0.28%) at 23,588.26. The S&P 500 posted a modest gain, unofficially closing up 12.46 points (0.18%) at 6,899.14.
In other economic news, the Federal Reserve Board unanimously approved the reappointment of its Fed Bank Presidents and First Vice Presidents. These new five-year terms are set to commence on March 1, ensuring continuity in leadership after a comprehensive review. Investors are also looking ahead to February 10, 2026, when the BLS is scheduled to release the U.S. Import and Export Price Indexes for December 2025.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.