Second-quarter sales came up short of Wall Street estimates in Costco’s second quarter, but earnings easily beat forecasts, with strong appliance sales contributing to gains.
Second quarter net income got a boost from a $94 million, or 21 cents per diluted share, tax benefit due to the deductibility of the $15 per share special dividend to the extent received by 401(k) plan participants, Costco pointed out.
Costco exceeded a MarketBeat-published analyst consensus estimate calling for adjusted diluted earnings per share of $3.62 but came up short of a revenue estimate of $59.11 billion.
With the effects of fuel price volatility and foreign exchange rate fluctuations excluded, comparable sales were up 4.8% in the United States, 9% in Canada and 8.2% in other international markets for a company total of 5.8%, while e-commerce comps advanced 18.2% in the quarter year over year.
Net sales for the quarter were $57.33 billion and total revenue was $58.44 billion versus $54.24 billion and $55.27 billion, respectively, in the year-before period, Costco noted. A shift in the fiscal calendar, as a result of the fifty-third week last year, negatively impacted net sales by 1.5% for the quarter, Costco pointed out. Operating income was $2.06 billion versus $1.9 billion in the year-previous period.
In a conference call, Richard Galanti, Costco executive VP and CFO, said store traffic was up 5% in the U.S. in the quarter. The strongest U.S.-selling regions were the Midwest, Southeast, and Northeast. As for product categories comps, nonfoods were up in the mid-single digits, food and sundries advanced in the mid-single digits and fresh food gained in the high single digits.
He added that appliance sales were strong, particularly online.
