Costco Underwhelms on Top and Bottom Lines, Despite Solid Comps

Chris Lange

Costco Wholesale Corp. (NASDAQ: COST) reported its fiscal first-quarter financial results after the markets closed on Tuesday. The company had $1.09 in earnings per share (EPS) on $27.22 billion in total revenue. That compared to consensus estimates from Thomson Reuters of $1.17 in EPS on revenue of $27.57 billion. In the same period of the previous year, the company posted EPS of $1.12 and $26.87 billion in revenue.

Net sales of $26.63 billion and membership fees totaling $593 million comprised total revenues.

Comparable sales for the quarter were down 1% from the same period last year. This included a 2% increase in the United States, a 9% decrease in Canada and a 5% decrease for all other international markets. However, excluding the impacts from gas price deflation and foreign exchange rates, total comparable sales increased 6%.

The company currently operates 697 warehouses, including 487 in the United States and 90 in Canada. It plans to open one more warehouse before the end of the 2015 calendar year.

On the books, the company has cash, equivalents and short-term investments totaling $6.28 billion, compared to $6.42 billion at the end of the previous fiscal year.

So far in 2015, Costco has outperformed the broad markets, with the stock up over 24% year to date. Over the past 52 weeks, the stock is up nearly 24%.

Shares of Costco closed Tuesday up 1.1% at $168.87, with a consensus analyst price target of $169.30 and a 52-week trading range of $117.03 to $169.73. Following the release of the earnings report, shares traded down about 2.8% at $164.20 in early trading indications Wednesday.