Costco Stock Falls After Weak Earnings Report

Costco stock is expected to fall on Friday after reporting weaker-than-expected earnings for fiscal Q1 2023.

On Thursday’s closing bell, the Washington-based company’s share price dropped by 0.11% to $481.42 apiece, and it is anticipated to further decline by 0.29% to $480.00 per share on December 09.

For the quarter ended in November, its earnings per share came lower at $3.07, short of the analyst consensus of $3.12 and below its previous record of $4.20.

Likewise, it posted revenue of $54.40 billion, shy of the market forecast of $54.79 and under its prior earnings of $72.09 billion.

Last month, Costco saw a weak trend in its sales, resulting in concerns about how it could boost profits.

In particular, its November earnings came lower by 5.70% to $19.17, lower than the 7.70% record in October and below the 10.10% in September.

Furthermore, analysts believe that the gas prices decline in the US may have affected Costco.

Meanwhile, investors are watching COST’s member retention rate and the amount it added in the quarter.

In light of this, the market eagerly awaits the retailer’s announcement of a membership price hike.

However, Costco hesitates to increase the subscription fee due to economy-related concerns in the wake of persistent inflation.

CFO of Costco Plans to Open Stores

On Thursday, Costco Chief Financial Officer Richard Galanti announced the company’s plan to open 24 new stores throughout the US.

According to Galanti, they have already launched the first seven establishments since September 01. One of these shops is located in Sweden, while the other is in New Zealand.

Furthermore, the retailer will open nine outside the US, including those that will be stationed in China. Meanwhile, the West will get 15 stores.

Consequently, Costco will launch three in the second quarter, four in the third, and 10 in the fourth.

In general, there will be a total of 27 shops if including the three relocations.