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Costco’s Sales Were Better Than Expected. The Stock Is Down.

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Costco was a winner in the pandemic, as shoppers flocked to its value offerings.

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Costco Wholesale

is trading lower after the close on Thursday, following discounter’s fiscal third-quarter results, which included better-than-expected sales.

Costco (ticker: COST) said it earned earned $3.04 a share, on revenue that rose 18.5% year over year to $52.6 billion. Analysts were looking for EPS of $3.04 on revenue of $51.56 billion. That’s an increase from the year-ago period, when Costco earned $2.75 a share on revenue of $45.3 billion.

Comparable sales, excluding gasoline and foreign exchange, were up 10.8% in the quarter.

Costco is down 1.8% to $456.50 at recent check, after rising 5.6% in regular trading.

Investors may have been hoping that Costco could have delivered a stronger profits, but at first glance it appears that, like the big box stores, higher sales didn’t all translate to the bottom line.

Costco has been notching record results throughout the pandemic, as shoppers flocked to its value offerings and memberships climbed.

However the stock’s winning streak has come under pressure of late, with Costco falling about 23% in the past month alone. That’s largely in part because of recent results from companies like


(WMT) which noted that some consumers at the lower end of the spectrum are feeling pinched by inflation.

That said, Costco tends to have core shoppers higher up the income scale than Walmart, and benefits from more value-conscious consumers. In addition, it’s worth noting that Walmart’s warehouse division, Sam’s Club, saw strong same-store sales in its quarter.

However, rapidly rising fuel prices can be a double-edged sword, given that discounters are using gas as a loss leader to bring in customers, weighing on margins.

Write to Teresa Rivas at

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