Costco Shares Slip After Q2 Earnings Fall Short

• Costco’s (COST) Q2 earnings of $4.02 per share missed the $4.09 consensus by $0.07, but revenues grew 9.0% to $63.72 billion, surpassing the $63.11 billion estimate, though its stock fell 1.33% to $1,013.00.
• The company’s 897 warehouses drove a 9.1% rise in adjusted comparable sales and a 22.2% e-commerce surge, highlighting resilience and digital growth despite the earnings shortfall.

Costco Wholesale’s (COST) fiscal second-quarter earnings for February revealed a mixed performance, with its stock dropping $12.87, or 1.33%, to $1,013.00 on Thursday. The company reported $4.02 per share, missing the consensus of $4.09 by $0.07, though revenues rose 9.0% year-over-year to $63.72 billion, slightly above the $63.11 billion expected. This earnings shortfall pressured the stock, yet the revenue growth underscores Costco’s resilience amid a competitive retail landscape.

Operating 897 warehouses globally – 617 in the United States and Puerto Rico, 109 in Canada, 41 in Mexico, 36 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand, and Sweden – Costco maintains a vast footprint. The 9.1% rise in adjusted comparable sales, excluding gasoline and currency fluctuations, reflects steady demand, while a 22.2% surge in e-commerce comparable sales highlights its digital momentum.

The $63.72 billion revenue figure, exceeding the $63.11 billion consensus, showcases Costco’s ability to drive growth, even as the $0.07 earnings miss suggests potential cost pressures. The market’s reaction – a 1.25% decline to $1,035.00 – may overemphasize the shortfall, given the 9.1% comparable sales growth and e-commerce strength at 22.2%. With 897 locations, from 41 in Mexico to seven in China, Costco’s scale remains a competitive edge.

The 22.2% e-commerce increase signals a successful adaptation to online retail trends, complementing its warehouse model. Despite the dip to $1,013.00, Costco’s $63.72 billion in sales and 9.0% revenue growth affirm its appeal to cost-conscious consumers worldwide. The $4.02 per share result, though below the $4.09 consensus, does not overshadow the company’s robust fundamentals and strategic balance of physical and digital channels.

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