Costco Wholesale Corp missed second-quarter revenue estimates for the fiscal year 2023, as shoppers looked to stretch their budgets and turned cautious about discretionary spending on the back of high inflation.
For the quarter ended February 12, 2023, Costco and its subsidiaries, which operate membership warehouses, reported earnings of $3.30 per share on revenue of $55.3 billion. The consensus earnings estimate was $3.20 per share on revenue of $55.5 billion.
The company said revenue grew 6.5% on a year-over-year basis as it earned $54.23 from net sales, and $1.02 billion from membership fees.
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Costco shares were down nearly 3.3% to $469.70 in morning trade on the Nasdaq.
Consumers have pulled back on purchases of apparel and electronics in recent months while continuing to spend on groceries and other necessities, according to some of the largest US retailers.
Costco mirrored the trend.
"We've seen some weakness in what I'll call big-ticket discretionary items," finance chief Richard Galanti said in a post-earnings call.
Galanti added that electronics, jewelry and housewares, among others, were the worst performers in February and in the fiscal 2Q.
Costco offers its members low prices on a limited selection of nationally branded and select private-label products in merchandise categories.
The company operates 848 warehouses, including 584 in the US and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the UK, 18 in Korea, and has a presence in Taiwan, Australia, Spain, France, China, Iceland, New Zealand and Sweden.
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