PARIS: After posting a positive earnings surprise of 2.3% in the final quarter of fiscal 2016, Costco Wholesale Corporation delivered a negative earnings surprise of 1.7% in the first quarter of fiscal 2017. Total revenue also fell short of the Zacks Consensus Estimate for the eighth straight quarter. The trend is reflected in the stock’s year-to-date performance, which shows that it has declined 6.5%, compared with the Zacks categorized Retail-Discount & Variety industry’s 6.5% gain.
Costco posted adjusted earnings of $1.17 per share that missed the Zacks Consensus Estimate by a couple of cents. Total revenue, which includes net sales and membership fee, came in at $28,099 million and fell short of the Zacks Consensus Estimate of 28,384 million.
However, despite the weaker-than-expected results, Costco’s shares inched up 1.4% during aftermarket trading yesterday. The upside was likely driven a year-over-year improvement in both the top and the bottom line of this warehouse club chain operator.
Total revenue grew 3.2% from the year-ago quarter, while adjusted quarterly earnings were up 7.3%. The bottom line benefited from lower credit card fees on account of a switch to Visa from American Express. The company managed to survive challenges like stiff competition and food price deflation that have been weighing upon the sector’s performance and allay investor concerns to some extent.
