Costco's earnings beat earnings estimates while revenue fell slightly, and shares fell

Costco (COST) once again increased its dividend as it announced its fiscal 2024 second-quarter results.

The Wholesale Club reported adjusted earnings per share (EPS) of $3.92, beating estimates of $3.62. Revenue was $58.44 billion, up 5.7% year over year, but slightly below expectations of $59.04 billion, according to Bloomberg data.

Same-store sales, excluding gas and foreign exchange, jumped 5.8%.

In the United States, same-store sales growth was higher than expected at 4.8%. Canada beat estimates with same-store sales growth of 9%, while international stores posted a higher-than-expected increase of 8.2%.

Membership fees, a major source of revenue, reached $1.11 billion, compared to $1.03 billion a year ago. This is also a jump from the first quarter, which brought in $1.08 billion.

TETTERBORO, NJ - JUNE 28: Customers check their purchases inside a Costco store on June 28, 2023 in Teterboro, New Jersey.  Costco is cracking down on sharing membership cards in its stores.  (Photo by Kina Bettencourt/VuePress)

Customers review their purchases inside a Costco store on June 28, 2023, in Teterboro, New Jersey. Costco is cracking down on sharing membership cards in its stores. (Kina Bettencourt/View Press) (Press presentation via Getty Images)

A Costco Gold Star membership costs $60 annually, while an Executive membership costs $120. Some on the Street last year expected Costco to raise fees this summer.

Before earnings, Joe Feldman, senior managing director of Telsey Advisory Group, told Yahoo Finance Live that “Costco is leading the way right now” as it continues to perform well, catering to the “more affluent consumer” looking for value.

E-commerce continues to gain momentum as well. In the second quarter, the company saw digital sales grow more than 18% compared to last year.

Costco shares are up more than 60% over the past year, easily beating the S&P 500's (^GSPC) gain of 29%. The retailer currently has 875 warehouses, with 603 locations in the United States and Puerto Rico.

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Earnings Summary:

Here's what Costco reported in its fiscal second quarter versus Wall Street estimates, according to Bloomberg data:

  • Net sales: $58.44 billion compared to $59.04 billion

  • Adjusted earnings per share: $3.92 vs. $3.62 expected

  • Same store sales growth: 5.8% versus 4.65% expected

    • US same-store sales growth: 4.8% vs. 4.09% expected

    • Same store sales growth in Canada: 9% vs. 6.31% expected

    • – Other countries: 8.2% compared to the expected 6.17%

Brooke DiPalma is a senior reporter at Yahoo Finance. Follow her on Twitter at @Brooke De Palma Or email her at [email protected].

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