A tough retail market helped the bulk retailer Costco Wholesale Corporation (NASDAQ:COST) draw people to its lower-cost members-only program, with results that were approximately in line with Wall Street projections.
As expected, the business reported diluted profits per share of $3.04 for the three months ended May 8, its fiscal third quarter, an increase of 10.5 percent over the prior year.
Despite a 100-basis-point drop in gross margins from the same time last year, group sales grew 16.3% to $51.61 billion, well short of analysts’ forecasts of $51.52 billion in revenue.
$984 million in membership income was generated, an increase of 9.2%. Same-store sales increased by 10.8%, falling short of Street expectations by over 200 basis points, while e-commerce sales increased by 7.9%.
Strong revenue growth and stable margins show that we have struck the proper balance in passing on rising costs. This morning, Costco’s shares opened at $457.00 per, a drop of 1.7 percent, after the company’s results report.
As a result of Russia’s invasion of Ukraine and OPEC’s inability to increase global supply, gas prices rose to $4.60 this week, according to AAA statistics.
Core consumer pricing pressures in the United States have continued to rise after last month’s minor decrease in inflation. This suggests that the world’s biggest economy will keep its high inflation rates for some time.
Core inflation, which includes food and fuel costs, climbed 0.6 percent month over month and 6.2 percent year over year, approaching the highest level since February 1991.
It’s been a rough start to the year for Walmart (WMT), Target (TGT), and Amazon (NASDAQ:AMZN), even though their first-quarter profits and outlook were lower than expected, owing to inflation, input cost pressures, and supply chain delays.
S&P 500 Retail Group’s share prices have fallen sharply so far this quarter, their worst performance since 1990, as investors fear further pain from both the Fed’s inflation-fighting rate rise and the highest domestic gas prices, which continue to impact family budgets and discretionary spending.
Retail sales in the United States increased in April despite record-high gas prices and rising inflation, according to figures published earlier this week by the Commerce Department, as the world’s most outstanding economy refused to capitulate.
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