Costco Wholesale Corporation (NASDAQ:COST) Misses Expectations

Posted by George Brook December 12, 2013 0 Comment 912 views

Costco Wholesale Corporation (NASDAQ:COST)’s stock seen some great movement yesterday as it traded with a significant volume of 6.11 million shares against its 30 day average volume of 1.72 million shares. Moreover the stock traded in a range of $116.97 and $120.30 before closing at $118.57. Besides its 1Q14 earnings release, predictions of retail sales growth to be highest in November in past five months could have buzzed the retail stocks.

A discount retailer Dollar General Corp. (NYSE:DG)’s stock also hit fresh 52 week high of $61.82 during yesterday’s trade and its 3Q13 performance was regarded as the best among peers by a Seeking Alpha contributor Valuentum. Dollar General’s same store sales grew 4.4% during 3Q13 ended November 1, 2013. Dollar General Corp. (NYSE:DG)’s management also raised the lower end of earnings per share guidance for FY13 from $3.15-$3.22 per share to $3.18-$3.22 per share.

1Q14 Sales Performance

Costco Wholesale Corporation (NASDAQ:COST) despite better 1Q14 earnings release could not meet the consensus street expectation. The retailer posted some 3% sales growths for stores open at least a year against an average expectation of 3.54%. The growth was largely attributed to lower gasoline prices and a stronger dollar and excluding fuel and forex it accounted for 5% increase in same-store sales. The overall sales grew 5% to $24.47 billion, missing street expectations of $25.35 billion.

1Q14 Earnings

Costco Wholesale Corporation (NASDAQ:COST) reported moderate increase in its 1Q14 earnings for the quarter ended Nov. 24. The profit remained $425 million or $0.96 per share as compared to $416 million or $0.95 per share during 1Q13. However analysts, on average, were expecting profit of $1.02 per share. This gap in earnings could be attributed to increase spending on technology as well as to higher stock-based compensation. Moreover 7.2% increase in selling, general and administrative expenses and 5.5% increase in operating expenses also pinched the earnings

About George Brook

George Brook covers money and politics for GDP Insider. George is a veteran journalist who has also covered Congress, national political conventions and presidential politics. George also covers the White House as well as economic and domestic policy for GDP insider. George's reporting has won numerous awards, including two Scripps Howard awards, two National Headliners, two Gerald Loeb Awards, as well as honors from Sigma Delta Chi and the National Press Club.

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