Costco earnings miss estimates as shoppers curb discretionary spending
Reuters
Published May 25, 2023 04:22PM ET
Updated May 25, 2023 05:44PM ET
By Granth Vanaik
(Reuters) - Costco Wholesale Corp (NASDAQ:COST) missed estimates for quarterly earnings on Thursday as shoppers pulled back on non-essential spending due to stubborn inflation and economic uncertainties.
With consumers prioritizing their spending on essential items, including packaged food and groceries, one-stop retailers such as Costco are grappling with a drop in demand for high-margin products such as home furnishings, jewelry, toys and electronics.
Shaky consumer sentiment has also impacted the results of Target Corp (NYSE:TGT) and Home Depot Inc (NYSE:HD) in the latest quarter, prompting them to issue disappointing forecasts.
Costco reported a quarterly profit of $2.93 per share, missing analysts' expectations of $3.29, according to Refinitiv data.
The warehouse club operator's total revenue for the third quarter was $53.65 billion, compared with the estimates of $54.57 billion.
"Costco's solid value proposition and loyal customer base were not enough to capitalize on economic fears, even with their well-priced mix of name brands and in-house Kirkland labeled products," said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.
Costco's quarterly revenue from memberships - priced between $60 and $120 per year and which account for most of Costco's gross margin - however, rose to $1.04 billion from $984 million, a year ago.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.