Costco Down After Missing Sales Estimate

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Costco Down After Missing Sales Estimate

Costco (COST) Down By 2% After Missing Sales Estimate

Costco shared its financial results for the 4th quarter, which showed better results as compared to the estimates set by the Wall Street experts. However, the shares of Costco Wholesale Corp. dropped by 2% during Wednesday's trading session.

During Q4, Costco's revenue was around $78.94 billion with $4.86 in earnings, while the estimate was for $77.72 billion in revenue and around $4.78 in earnings.

$78.4 Billion Revenue In Q4

And if we look at the comparable sales of Costco, it also jumped by 1.1% if we exclude the currency & gas changes. In addition, the sales of same-store increased 3.8% against the expectations of 3.9%.

In the Canada and the US regions, the sales increased by 1.8% and 0.2%, while international sales saw a jump of 5.5%. However, the sales coming from the e-commerce channels went lower by 0.6%.

Just like that, the money collected from membership fees was recorded at $1.51 billion, while it was only around $1.34 last year. As for whether Costco will increase its membership fees, the management made it clear that no decision has been made yet.

Overall, the stock market's reaction to the Costco earnings results isn't that good, and there are a few reasons for that. The first one is the fact that Costco is really careful about how it faces the economic headwinds. Similarly, the results were not up to the mark as the expected costs also went up a notch.

Despite the mixed reaction from the market players, Goldman Sachs remains bullish on Costco Corp., which suggests that the retail giant is still going strong. According to Goldman Sachs, the value proposition offered by Costco is in line with what the customers want! At the same time, the company has also introduced an SKU model and a scale mode to manage the cost pressure.

These factors are still in place, which has allowed Goldman Sachs to maintain a buy rating on the Costco stock.

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