Costco reported higher than estimated earnings in the second quarter but posted revenue below market estimates, leading to a decline in the share price of almost 6 percent premarket trading. As earlier reported, the giant retailer posted higher earnings due to the robust sale of gold and silver bars and everyday essentials at customer-friendly prices. Costco has seen a 55 percent price increase over the past year, higher than the 29 percent S&P 500 gain.
Analysts estimated net sales to be $59.04 billion, but the warehouse giant posted $58.44 billion. This rare miss resulted in a decline in share price, although some analysts consider the stock neutral. However, Costco posted higher earnings per share at $3.92, while analysts had estimated $3.62 EPS.
Costco also posted other growth results. Same-store sales growth was 5.8 percent, while Wall Street estimated 4.65 percent. US stores registered 4.8 percent, while the expected growth was 4.09 percent. Stores in Canada grew by 9 percent, much higher than analysts’ estimate of 6.31 percent. International growth was reported as 8.2 percent versus the expected growth of 6.17 percent.
Costco saw an 18 percent increase in digital sales compared to a year ago. In a conference call late Thursday, CFO Richard Galanti told analysts that increased demand for appliances and the sales of gold and silver bars accelerated digital sales.
Galanti also mentioned the opening of Costco’s first fully operated sushi bar in the US. It opened in Issaquah, Washington, near the warehouse giant’s headquarters.
Other gains by Costco include increased customer traffic in the US, which increased 4.3 percent this quarter.
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