Costco Wholesale Corp. (COST) missed consensus on second quarter of fiscal 2018 results and the stock fell 1.1% in after-hours trading Wednesday.
Costco posted diluted earnings per share of $1.42 while analysts expected earnings per share of $1.47 on average. The earnings per share exclude tax benefit of 17 cents per diluted share resulting from the new tax laws. The miss produced a negative surprise of 3.4%.
For the second quarter of fiscal 2018, Costco reported revenue of approximately $33 billion, a 10.8% growth from the comparable of fiscal 2017 and beat expectations by $280 million.
The chart below shows the trend in Costco’s total revenue over the last five second quarters (Costco bases its fiscal year from September to August):
In the second quarter, the U.S. wholesale hypermarket chain company reported an 8.4% year-over-year increase in comparable sales, including the item of gas, inflation and foreign exchange. When gas, inflation and foreign exchange items are excluded, the jump is only 5.4% year over year.
In North America, comparable sales including gas, inflation and foreign exchange, were up 15.8%, while those excluding gas, inflation and foreign exchange were up 8.2%. The U.S. segment contributed with a 45% and 69.5% to the North American growth in comparable sales with and without gas inflation and foreign exchange.
During the reporting period, international sales jumped 15.7% year over year while e-commerce sales rose 28.5%, both with gas, inflation and foreign exchange items.
Membership revenue, which was approximately 2.2% of total revenue, increased by 12.6% to $716 million in the second quarter of fiscal 2018.
As of the second quarter of fiscal 2018, Costco had approximately $6.830 billion in cash on hand and securities. Costco’s total assets and liabilities were valued $38.703 billion and $26.650 billion. Total current assets were valued $18.899 billion while total current liabilities were valued $18.913. As a result, the current ratio is 0.99 versus an industry average of 1.21. The company had long-term debt of $6.505 billion, while the total equity was worth $12.053 billion. The long-term debt to equity ratio was 54%.
Costco Wholesale Corp. is currently trading at $187.36 per share on the Nasdaq stock exchange. The stock gained a bit more than 13% for the 52-weeks through March 7, but underperformed the S&P 500 index with about 2.3%:
Source: Yahoo Finance
The stock is still trading below the 50-SMA line but plainly above the 200 and 100-SMA lines. The current share price is beyond the midst of a $150.00 to $199.88 52-week range.
Costco has a forward dividend yield of 1.04% versus an industry median that is 2.14%, according to GuruFocus.
(Disclosure: No positions in Costco Wholesale.)
