Costco Wholesale’s (COST) stock plummeted 6% in after-hours trading, extending losses from Thursday’s session. The company reported mixed results for its fiscal second quarter, with adjusted earnings per share coming in at $4.02, slightly below Bloomberg consensus estimates of $4.11.
Revenue rose to $63.72 billion, beating expectations of $63.01 billion, but same-store sales grew only 6.8%, missing the estimate of 6.38%. International markets saw a decline, with Canada and other international sales growth at 4% and 1.7%, respectively.
Despite these results, CEO Ron Vachris praised his team’s efforts in delivering strong operating results, citing an uncertain macro environment. CFO Gary Millerchip noted that consumers are still focused on “quality, value, and newness,” but remain “very choiceful” due to inflation concerns.
The company also saw growth in e-commerce, with sales increasing by 22.9%. Membership fee revenue rose to $1.19 billion, while same-store sales of gold and jewelry grew by double digits.
However, tariffs loom as a concern for the industry. President Trump extended a one-month tariff exemption to some goods and services imported from Canada and Mexico, which may impact Costco’s supply chain costs. The company plans to minimize these impacts through its global buying power and supplier relationships.
In contrast, peers such as BJ’s Wholesale Club (BJ) and Walmart (WMT) are outperforming, with shares rising 28% and 5.6%, respectively, this year. Analysts remain bullish on Costco’s stock, citing its value proposition in an environment where consumers adjust to higher prices.
Source: https://finance.yahoo.com/news/costco-stock-falls-after-retailer-misses-on-earnings-faces-cautious-consumers-and-tariff-threats-231334373.html