Important points
Costco Wholesale reported fiscal fourth-quarter profit that beat analysts’ expectations but narrowly missed revenue. The warehouse retailer’s e-commerce sales were weaker than expected despite rising 18.9% year over year as the pace of growth slowed. On the other hand, Costco’s recent business performance was not affected by the increase in membership fees during the current period, but investors are paying close attention to how the increase in membership fees will affect the company’s performance in the future.
Costco Wholesale (COST) announced fourth-quarter financial results that exceeded analysts’ expectations, but sales fell short by a narrow margin due to slowing growth.
The membership retailer’s net income rose 7% from a year earlier to $2.35 billion, or $5.29 per share, beating the consensus of analysts compiled by Visible Alpha. However, sales rose only 1% year-on-year to $79.7 billion, slightly below expectations.
Costco’s e-commerce sales rose 18.9% year-over-year, but fell short of expectations as growth slowed from more than 20% in the previous quarter. Same-store sales rose 5.3% in the U.S. and 5.5% in Canada, also slowing from the previous quarter.
Thursday’s report was the warehouse retailer’s first since increasing its membership fees. The fee increase went into effect at the end of the period and did not affect Costco’s latest results, but investors will be keeping an eye on how it will affect the company’s bottom line going forward.
Costco shares fell about 1% to $892.55 in after-hours trading Thursday after the announcement.
