Costco Wholesale Corporation (NASDAQ:COST) Misses Expectations
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.
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