After hours on Thursday, Costco Wholesale Corp.’s stock fell after the membership warehouse chain revealed revenue and profit per share that fell short of Wall Street’s forecasts.
Revenue for Costco’s fiscal second quarter increased 9.1% year over year to $62.53 billion, which was less than the $63.11 billion FactSet analysts had predicted. The 6.8% increase in same-store sales was higher than the 6.4% prediction. Sales of e-commerce increased by 20.9%.
Costco made $4.02 per share on a GAAP basis, whereas FactSet predicted $4.11.
Costco reported $19.81 billion in revenues for the four weeks ending March 2, which it designated as the retail month of February. This is an 8.8% increase in sales year over year.
After-hours shares (COST) dropped 1.4%.
The business came after Walmart Inc. (WMT), which is one of the safest investments in the retail industry because of its scale and capacity to maintain lower pricing, recently announced that its quarterly profit had dropped for the first time in three years. Target Corp. (TGT), on the other hand, issued a warning about potential price hikes in reaction to President Donald Trump’s tariffs, which are essentially an import tax.
However, those tariffs have not changed. Trump said on Thursday that the majority of the goods will be exempt from the new 25% tariffs on Mexican imports that went into effect earlier this week until the beginning of April.
Additionally, January saw a decline in retail sales as a result of cold weather and a hangover from Christmas expenditures. There have also been indications of a decline in consumer confidence.
The largest merchants, like Costco and Walmart, have gained more traction with affluent consumers seeking a reprieve from inflation as a result of rising living expenses. As drugstore chains suffer, Costco reported that its pharmacy division was growing strongly and saw increases in sales in December and January.
Over the previous 12 months, Costco’s stock increased by almost 30%.
