Costco (COST) Q4 Earnings Results Fall As Earnings Narrow
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Summary:
- After the better-than-anticipated Q4 earnings on Friday, COST shares declined.
- COST noticing signs of inflation pressures slowing down.
- Pre-market trading saw COST shares down 3.5%.
Costco Q4 earnings results
Following the bulk retailer's release of better-than-anticipated fourth quarter earnings on Friday, Costco Wholesale (COST) shares declined. However, the store also cited challenges on profit margins due to rising inflation prices and changing consumer patterns.
Costco reported that diluted earnings for the fiscal fourth quarter, which ended on August 28, were up 11.7% from the prior year to $4.20 per share, above Street expectations by about 4 cents per share.
With membership income increasing 7.5% to $1.327 billion, total revenues increased by 15% to $72.091 billion, just over analysts' predictions of a $72.07 billion total. According to Costco, same-store sales increased globally by 13.7% and in the US by 15.8%, while e-commerce sales increased by 7.1%.
Costco reported that while overall inventories were up 26% from the previous year and had seen some minor recovery over "only the past few weeks," gross margins had shrunk by about 80 basis points to 10.18%.
The company added that seasonal sales "seem to be going well" and that it is beginning to notice signs of inflation pressures slowing down.
To reflect a Friday opening bell price of $471.01 per share, Costco shares were marked 3.3% down in pre-market trading, bringing the stock's six-month drop to over 15%.
Since pump prices plummeted more than 20% from their record high of $5.10 per gallon in early June to the conclusion of Costco's fourth quarter, and core inflation decreased from 1% in May to 0.1% in August, falling gas prices may be the reason why revenues were only slightly above expectations.
Pre-market trading saw COST share price down more than 3.5% on Friday, and were down 1.2% at Thursday's market closing.
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Sources: finance.yahoo.com, thestreet.com
