By
Reuters
Published
Mar 3, 2016
Download
Download the article
Print
Text size

Costco quarterly earnings miss estimates

By
Reuters
Published
Mar 3, 2016

Costco Wholesale Corp reported lower-than-expected quarterly earnings, hurt by lower traffic in January and a strong dollar.

Excluding fuel and foreign exchange impact, same store sales rose 5 percent, below the 5.4 percent growth expected by analysts polled by research firm Consensus Metrix.



The average value of the dollar against a basket of currencies was 8.2 percent higher in Costco's second quarter compared with the same quarter last year. The company gets about 27 percent of its revenue from outside the United States.

Net income attributable to Costco fell to $546 million, or $1.24 per share, in the second quarter ended Feb. 14, from $598 million, or $1.35 per share, a year earlier.

The warehouse club retailer's revenue rose 2.6 percent to $28.17 billion.

Traffic to Costco's stores slowed in January due to adverse weather and the Super Bowl shifting to February this year, analysts have said.

"Costco's traffic trend has turned more volatile in recent months, especially since the first gas price-induced step up that started in August 2014 and a subsequent step down. In addition, Costco has faced incremental deflation," JP Morgan analyst Christopher Horvers wrote in a pre-earnings note.

The company was expected to report earnings of $1.28 per share on revenue of $28.43 billion, according to Thomson Reuters I/B/E/S.

Sales at rival Wal-Mart Stores Inc missed market expectations last month, hurt by a strong dollar, declining prices for grocery products and sluggish apparel demand.

Shares of the Issaquah, Washington-based company fell 5.4 this year.

 

© Thomson Reuters 2024 All rights reserved.