Costco Is Still the Big-Box Favorite After Underwhelming Earnings

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source: http://www.flickr.com/photos/imosaad/

Source: http://www.flickr.com/photos/imosaad/

Shares of Costco Wholesale Corp. (NASDAQ:COST) fell as much as 2.6 percent in premarket trading after the big-box retailer reported underwhelming fiscal first-quarter results.

Net sales increased 5 percent on the year to $24.47 billion, and membership fees increased 7.4 percent to $549 million. Total revenue was up 5.5 percent on the year at $25 billion, below the mean analyst estimate of $25.35 billion. Net income per diluted share climbed 1 cent on the year to 96 cents, below the mean analyst estimate of $1.05.

Perhaps the most important thing to keep in mind is that Costco’s fiscal first quarter ended November 24, before Black Friday on November 29. While it’s unclear that normalizing for Black Friday sales would fill the expectations gap, the timing makes year-over-year comparisons a little dubious.

For the 12 weeks ended November 24, though, Costco reported net sales growth of 3 percent and comparable sales growth for 5 percent (excluding negative impacts from gasoline price changes and foreign exchange). The company reported 648 operating warehouses.

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