Did Analysts Overshoot Costco Earnings?
Costco reported disappointing fiscal second-quarter financial results after the markets closed on Thursday, due in part to COVID-related costs.
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When Costco Wholesale Corp. (NASDAQ: COST | COST Price Prediction) reported its fiscal second-quarter financial results after the markets closed on Thursday, the retailer said that it had $1.89 in earnings per share (EPS) and $37.27 billion in revenue. The consensus estimates had called for $2.04 in EPS and $37.52 billion in revenue. The same period of last year reportedly had $1.89 in EPS and $34.74 billion in revenue.
Note that earnings were negatively affected by $283 million pretax, or $0.47 per diluted share, charge from incremental wage and sanitation costs related to COVID-19.
During the latest quarter, net sales increased 7.3% year over year, while membership fees increased 5.0%.
Comparable sales increased 4.8% on a companywide basis, driven by:
- U.S. comparable sales increasing by 5.9%
- Canada comparable sales decreasing 2.5%
- Other international comparable sales increasing 6.2%
- E-commerce sales increasing by 64.5%
Costco currently operates 787 warehouses, including 547 in the United States, 100 in Canada and 39 in Mexico. The remainder are located in the United Kingdom, Japan, Korea, Taiwan, Australia, Spain, France, Iceland and China.
Costco Wholesale stock closed Thursday at $309.56, in a 52-week range of $233.05 to $325.26. Following the announcement, the stock was down about 2% at $309.56 in early trading indications Friday.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
