Home Costco Q2 Earnings Beat Estimate but Sales Fall Short
March 8, 2024

Costco Q2 Earnings Beat Estimate but Sales Fall Short

Posted In: Retail Articles

By: Mike Duff

Contributing Editor

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.

The company reported that the net income for the quarter was $1.74 billion, or $3.92 per diluted share, versus $1.47 billion, or $3.30 per diluted share, in the year-prior period.

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.

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