Costco Drops the Bag, Reports a Steep Decline in Quarterly Profit

Costco blamed lower international profits and weak sales during the all-important holiday shopping season for its shortcomings in the period.

Mar 6, 2014 at 9:58AM
Costco

Costco (NASDAQ:COST) reported second-quarter earnings before the market opened today that missed analysts' estimates. For the quarter ended Feb. 16, Costco posted a profit of $463 million, or $1.05 per diluted share. That marked a 15% decline in profit from the same period a year ago, in which Costco earned $547 million, or $1.24 per diluted share. Wall Street was looking for earnings per share of $1.17 in the period.

Costco said revenue increased 6% in its second quarter to $25.76 billion, up from $24.34 billion last year. Analysts were looking for revenue of $26.65 billion in the quarter. The warehouse club blamed lower international profits and weak sales during the all-important holiday shopping season for its shortcomings in the period.

However, one bright spot from the quarter included a 4% rise in revenue from membership fees to $550 million, up from $528 million in the year-ago period. Additionally, sales at stores open more than 12 months increased 5% in the quarter, excluding negative impacts from gas prices and foreign exchange rates. Costco's chief executive, Richard Galanti, said in the company's press release that "the first four-week period of the quarter represented the majority of earnings underperformance in the quarter."

Looking ahead, Costco plans to open as many as 14 new warehouse stores in fiscal 2014. The company currently operates 649 retail outlets, with the bulk of those located in the United States. Shares of Costco were down more than 3% in early trading on Thursday.

link

Tamara Rutter has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers