Costco in mixed quarter as earnings disappoint, but revenue, comp sales strong
Costco Wholesale Corp. reported a mixed second quarter with earnings that missed expectations but revenue that topped estimates as traffic increased in-store and online.
On the the membership warehouse club giant’s earnings call, CEO Ron Vachris said that about one-third of Costco’s U.S. sales were products imported from other nations, with less than half from China, Mexico and Canada.
“In uncertain times, our members have historically placed even greater importance on the value of high-quality items at great prices, and our teams will continue to rise to this challenge by leveraging our global buying power, strong supplier relationships and innovation,” Vachris said.
Costco's net income totaled $1.79 billion, or $4.02 per share, for the quarter ended Feb. 16, compared with $1.74 billion, or $3.92 per share, during the year-ago period. Analysts had expected earnings per share of $4.11.
Revenue rose 9% to $63.72 billion, above estimates for $63.11 billion. Net sales for the quarter increased 9.1% to $62.53.
Total company same-store sales increased 6.8%, also more than expected, with a 8.3% rise in the U.S. E-commerce comparable sales jumped 20.9%.
Membership fees for the quarter totaled $1.19 billion, up from $1.11 billion in the second quarter last year. Costco reported that it had 78.4 million paid memberships and 140.6 million total cardholders.
While other retailers reported that cold temperatures took a toll on sales in February, the weather didn’t appear to bother Costco shoppers. For the month of February, ended March 2, Costco’s net sales rose 8.8% to $19.81 billion. Total comp sales in February were up 6.5%, with an 8.6% increase in the U.S.
Costco plans to open 28 new clubs (includes three relocations) during its current fiscal year, which ends in August.
Costco currently operates 897 warehouses, including 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 also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
