Costco stock falls after hours as retailer’s earnings disappoint, online sales fall

Revenue rose 8% to $54.44, from $50.36 billion a year ago, Costco said. Same-store sales rose 6.6%, but e-commerce sales declined 3.7% in the quarter.

Analysts polled by FactSet expected Costco to earn $3.12 a share, on revenue of $58.36 billion. Those analysts saw same-store sales rising 6.4%.

Costco reported quarterly earnings as analysts raise questions about how it might boost margin and profit, following weaker sales trends last month.

DA Davidson analyst Michael Baker, in a note Monday, said that with Costco’s monthly sales out of the way, the investor focus for the retailer’s results would be on gross margins.

He also said he’d be looking for more detail on gas prices’ impact on profit, and the broader state of same-store sales, as inflation shows some signs of easing. Baker also said the company faced questions about a possible membership-fee hike.

“However, with consumers struggling through higher costs across the board, (Costco) may be reluctant to add to that pressure in the near term,” he said.

Costco, in the early days of the pandemic, recorded big gains amid a surge in panic buying.

But the chain last week raised bigger concerns about potentially weaker demand after it reported slowing November sales, despite big holiday shopping days like Black Friday.

Oppenheimer analysts said the sales numbers indicated “meaningfully” weaker trends. And they noted price cuts on electronics at some stores and markdowns on bigger items that may not have been drawing consumers.

Costco stock is down 15% year-to-date. By comparison, the S&P 500 Index
SPX,
+0.75%
has fallen 17% over that time.

Claudia Assis in San Francisco contributed to this report.