Prime Highlights:
Costco reported earnings of $4.02 per share, missing analysts’ expectations of $4.11.
Net sales reached $62.53 billion, exceeding the $63.13 billion forecast.
Key Background:
Costco Wholesale Corporation reported mixed results for its fiscal second quarter, falling short of earnings expectations but exceeding revenue projections. The company’s net sales for the quarter reached $62.53 billion, reflecting a 9.1% increase compared to the same period last year. However, earnings per share came in at $4.02, slightly below the anticipated $4.11.
Comparable sales for the quarter grew by 6.8% year-over-year, surpassing the 6.4% estimate by analysts, with U.S. comparable sales climbing 8.3%. E-commerce sales also performed well, rising 20.9% from the previous year. Despite this positive sales momentum, Costco’s shares saw a slight dip of over 1% in after-hours trading.
Costco’s total revenue for the quarter reached $63.72 billion, a 9% year-over-year increase from $58.44 billion. Membership fees contributed $1.19 billion, up from $1.11 billion in the same period last year, driven by a 0.1% increase in membership renewal rates, which reached 90.5%. The retailer also noted a slight impact from the September 2024 membership fee increase, which had a modest 3% effect on this quarter’s total membership revenue.
CEO Ron Vachris addressed the challenges posed by rising tariffs, particularly on groceries, while emphasizing Costco’s ability to leverage its strong supplier relationships to minimize price increases for its members. Despite tighter margins in certain categories, the company remains focused on delivering value through quality products at competitive prices.
Costco’s net income for the quarter stood at $1.79 billion, or $4.02 per share, up from $1.74 billion, or $3.92 per share, in the prior-year period. The company continued to experience growth in key categories such as jewelry, furniture, hardware, and toys, all of which saw double-digit sales increases. Looking ahead, Costco remains optimistic about its ability to navigate current economic uncertainties and deliver strong value to its members.
