Costco posts Q2 EPS beat but sales miss; analysts maintain an optimistic growth forecast.
Costco (NASDAQ:COST) announced mixed second-quarter numbers. EPS came in at $3.30, exceeding the $3.21 average forecast. Revenue increased 6.5% year on year to $54.24 billion, falling short of the average expectation of $55.55 billion as consumers restrict their spending on luxury goods due to ongoing high inflation.
In premarket Friday dealing, shares are down 2.5%.
Comparable sales rose 5.2% in the second quarter (or 6.8% excluding the effects of shifts in fuel costs and foreign currencies), with the United States up 5.7%, Canada up 3.5%, and Other International up 3.8%.
After the business produced a “solid” quarter, Bernstein analysts reduced their price target by $18 to $568 per share.
“We remain optimistic about the prospects, particularly for medium- to long-term buyers… The prognosis for growth stays optimistic. They sent letters to their customers.
According to Oppenheimer analysts, the drop in COST shares following the results is “primarily due to the absence of a membership price increase, which had been expected with this report.”
“We would take advantage of weakness rather than pursue strength, as street numbers continue to look elevated to us.” Because of the possibility of a special dividend in the future, interest income is a bit of a wildcard in our modelling, and we have modelled conservatively from a longer-term perspective. “We still anticipate a membership price increase and a special dividend in the future quarters,” analysts informed the broker’s customers.
