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Investago | Costco's Q2 Earnings Mostly Beat Expectations, Shares Dip 2%
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Costco's Q2 Earnings Mostly Beat Expectations, Shares Dip 2%

Costco (COST) recently reported mostly positive fiscal second-quarter earnings, despite shares dropping over 2% after the announcement.*

costoco

Performance of Costco Wholesale Corporation over 5 years. Source: tradingview.com

 

The wholesale retailer's quarterly revenue slightly missed expectations, reaching slightly over $55 billion, but increased 6.5% year over year. Net sales also grew 6.5%. Costco's adjusted earnings per share came in at $3.30, surpassing the expected $3.21, while same-store sales rose 6.8%, beating the 6.16% projection.

 

 

Costco's U.S. sales increased 5.8%, falling slightly short of the anticipation. In contrast, the retailer outperformed expectations in Canada and other international markets, with same-store sales rising respectively 9.5%. Last quarter, e-commerce sales declined 9.6%.

 

 

In the first four weeks of February, which marks the beginning of Q3 FY23, U.S. sales grew 3.4%, Canadian sales rose 1.2%, and international sales increased 6.5%. However, e-commerce sales declined 11.2% in February. Costco's private label business, Kirkland Brands, experienced a sales boost due to inflation, with a roughly 1.5% increase.

 

 

Costco CFO Richard Galanti hinted at a potential membership fee increase during an investor call, as the company typically raises prices every five years and seven months. Membership fees for Q2 reached over  $1 billion, up 6.2% from the previous year and slightly above Wall Street's estimate of $1.04 billion. Presently, a Costco Gold Star membership costs $60 per year, while an Executive Membership is priced at $120.

 

* Past performance is no guarantee of future results.

 

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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.