Costco stock falls 1% after quarter miss estimates, online sales drop

Costco Wholesale Corp. stock fell by 1% in the extended session Thursday after the retailer missed Wall Street expectations for its fiscal first quarter and online sales dropped.

Costco COST earned $1.36 billion, or $3.07 a share, in the quarter, compared to $1.32 billion, or $2.98 a share, in the year-ago period.

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

The analysts polled by FactSet expected Costco to earn $3.12 a share, with revenue of $58.36 billion. The same-store sales were up 6.4%, according to analysts.

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

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

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

With consumers struggling with higher costs across the board, Costco may be reluctant to add to that pressure in the near term, he said.

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

Last week, the chain raised concerns about weaker demand after it reported a slow November sales, despite big holiday shopping days like Black Friday.

Oppenheimer analysts said the sales numbers indicated weaker trends. They noted price cuts on electronics at some stores and markdowns on bigger items that may not have been well received by consumers.

Costco's stock is down 15% year-to-date. The S&P 500 Index SPX has fallen 17% over that time.