Costco (NASDAQ:COST) reported mixed fiscal second-quarter results, as revenue topped estimates while earnings came in below expectations. The warehouse retailer saw strong consumer demand, driven by inflation concerns and bulk-buying trends, but margin pressures weighed on profitability. Shares dropped more than 6% intra-day today following the report.
Costco posted quarterly earnings per diluted share of $4.02, missing analyst expectations of $4.11. However, revenue came in at $63.72 billion, surpassing the forecasted $63.08 billion.
Comparable sales, which account for fluctuations in gas prices and foreign currency, rose 6.8% year-over-year. Additionally, membership fees climbed 7.4% to $1.19 billion, slightly below the estimated $1.22 billion but still reflecting solid customer retention and growth.
Despite the revenue beat, Costco faced pressure on its gross margins due to rising input costs. Egg prices have surged as U.S. bird flu outbreaks impact supply, while increases in cocoa and coffee prices have added further cost pressures.
Although Costco remains a strong player in the retail sector, investors reacted cautiously to the earnings miss and the lingering inflationary concerns affecting margins.
