Categories AlphaGraphs, Earnings, Retail

Costco Wholesale stock gains after Q2 earnings beat estimates

Benefitting from strong store traffic and online sales, warehouse retailer Costco Wholesale Corp. (COST) Thursday reported a 26% growth in second-quarter earnings, which also exceeded the estimates. The company’s stock gained about 4% in the after-hours trading session following the announcement.

An infographic on Costco's second quarter 2019 earnings results
Costco Wholesale Q2 2019 Earnings Infographic

The Issaquah, Washington-based retailer reported a net profit of $889 million or $2.01 per share, higher than the previous year’s $701 million or $1.59 per share. Analysts had forecast slower bottom-line growth.

Total comparable store sales were up 5.4% during the quarter, with US same-store sales jumping 7.4%. There was a 20.2% annual growth in online merchandise sales. Consequently, overall revenues rose 7.3% to $35.4 billion, but slightly missed the estimates. Sales and membership fees grew 7.2% each annually to $34.6 billion and $0.77 billion, respectively.

Total comparable store sales were up 5.4% during the quarter, with US same-store sales jumping 7.4%

In February, net sales moved up 5% to $10.72 billion, which followed a 7.8% gain in January.  The sequential growth deceleration is attributed to adverse weather conditions and the shift in the timing of the Chinese New Year. Comparable store sales and e-commerce sales rose 3.5% and 24.2% respectively during the month.

Currently, the company operates 770 warehouses. With 535 units, the region comprising the United States and Puerto Rico continues to be the top market. There are 100 warehouses in Canada, 39 in Mexico and 28 in the United Kingdom. Japan, Korea, and Australia have 26, 15 and 10 outlets respectively.

Related: Walmart stock jumps on impressive Q4 earnings

While leading the American warehouse-club market, Costco has been facing stiff competition from rivals like BJ’s Wholesale in recent years. Others like Sam’s Club of Walmart(WMT) have improved their position in the sector by investing in technology and other infrastructure, challenging Costco’s dominance.

The company’s shares moved up 16% in the past 52 weeks and gained 6% since the beginning of the year, but continued to underperform the market. The stock closed Thursday’s regular session lower but gained sharply in the after-hours following the earnings report.

 

Earnings Calendar: Browse through our earnings calendar and get all scheduled earnings announcements, analyst/investor conference and much more!

Most Popular

United Parcel Service (UPS) seems on track to regain lost strength

Cargo giant United Parcel Service, Inc. (NYSE: UPS) ended fiscal 2023 on a weak note, reporting lower revenues and profit for the fourth quarter. The company experienced a slowdown post-pandemic

IPO Alert: What to look for when Boundless Bio goes public

Boundless Bio is preparing to debut on the Nasdaq stock market this week, and become the latest addition to the list of biotech firms that have launched IPOs this year.

Nike (NKE) bets on innovation and partnerships to return to high growth

Sneaker giant Nike, Inc. (NYSE: NKE) has been going through a rough patch for some time, with sales coming under pressure from weak demand and rising competition. Post-pandemic, the company

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top