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