Cramer says Costco reported a “beautiful quarter” and that the stock is worth owning

CNBC’s Jim Cramer praised the strength of Costco’s (COST) business on Wednesday, the morning after the membership-based retailer reported strong quarterly results.

“It was just a nice quarter,” Cramer said on “Squawk on the Street,” with Costco seeing “inflation coming down fairly quickly” across a range of different products and experiences “deflation quite a bit” compared to other retail peers. Shrinkage is an industry term that refers to inventory losses due to theft, damage, or seller fraud.

Costco shares rose more than 1.5% Wednesday each, pushing the stock’s year-to-date gains to about 23%. That’s better than the S&P 500’s gain of 11.6% so far in 2023.

However, initial reaction to Costco’s earnings report after the bell — which beat Wall Street’s sales and earnings expectations — was rather poor. Some of the disappointment may stem from the fact that Costco “didn’t give you a special dividend” and “didn’t raise prices for members,” Cramer said. Investors have been anticipating both measures for some time.

As these catalysts continue to play out, Cramer said several Wall Street firms, including Goldman Sachs, have raised their price targets on Costco stock, which he suggested bodes well for the stock going forward.

Cramer’s Charitable Trust, the portfolio used by CNBC Investing Club, owns shares of Costco. The club’s other primary retail property is TJX Enterprises (TJX), the parent company of TJ Maxx, Marshalls and Home Goods. Cramer is scheduled to interview Costco CEO Craig Jelinek on “Mad Money” Wednesday night.

Below is a complete list of stocks in Jim Charitable Foundationt, the wallet used by CNBC Investing Club.

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