Costco Logs Disappointing Sales
01 September 2016 - 11:30PM
Dow Jones News
Sales at Costco Wholesale Corp. grew a disappointing 2% in the
latest quarter, as the warehouse club becomes the latest retailer
to report lackluster results.
Shares in the company declined 2.2% to $158.50 in premarket
trading.
Sales for the fourth-quarter ended Aug. 28 rose to $35.7 billion
from $35.0 billion a year earlier, the company said, but fell short
of the $37.2 billion analysts had anticipated.
Costco joins a chorus of retailers reporting softer sales as
foot traffic falls and online retailers like Amazon.com grab
business. Department store giant Macy's Inc. last month said it
would shrink its store base by about 15%; Target Corp. reported its
first same-store sales decline in more than two years; and many
companies reliant on mall traffic—such as eatery Ruby Tuesday and
cosmetics company Esté e Lauder—are feeling the pinch.
For Costco, the price of gasoline has been an added pressure.
The company is one of the biggest gasoline sellers in the country,
and it benefited from the oil market's collapse and its ripple
across commodity markets as the retailer captured falling wholesale
prices at a faster rate than smaller gas stations. But energy
prices have stabilized in recent months, with the price of gasoline
rising 16% during the month of August and roughly flat from a year
ago.
The company said sales at existing stores were flat in August
and for the quarter. Excluding gas sales and backing out adverse
currency fluctuations, sales on that basis rose 2% in August and 3%
for the quarter. Canada was a bright spot, logging 5% same-store
sales growth for the quarter and outpacing 2% domestic growth.
Analysts, according to Thomson Reuters, were expecting Costco to
report same-store sales growth of 1.3% in August and 3.4% excluding
gas.
Costco will report full fourth-quarter results on Sept. 29.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
September 01, 2016 09:15 ET (13:15 GMT)
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