Costco Shares Are Trading Lower Friday: What's Going On?

Costco Wholesale Corporation (NASDAQ: COST) shares are trading lower Friday despite a fourth quarter earnings beat.

What To Know: Costco reported earnings per share of $5.87, beating the consensus estimate of $5.80. In addition, the company reported sales of $85.16 billion, beating the consensus estimate of $86.11 billion.

Comparable sales grew 5.7% in the quarter, compared with expectations of 5.9%. Membership fee revenue increased 14% year-over-year, continuing to provide a steady stream of income for the retailer.

The company said it ended the quarter with 735 warehouses in the United States and 880 worldwide. Costco's e-commerce operations also advanced, with online sales rising 6.1% from the prior year period.

Operating income for the quarter reached $2.84 billion, while net income totaled $2.61 billion. The retailer noted strength in categories such as food, health and wellness, and fresh products, while discretionary areas like electronics and home goods were softer. Traffic increased globally by 4.4% during the quarter and by 4.9% in the U.S.

Costco ended the quarter with cash and equivalents of $16.9 billion and long-term debt of $6.6 billion. Capital expenditures totaled $5.2 billion, and the company expects to spend about $5.5 billion in the 2025 fiscal year.

Analyst Changes: Following the earnings report, multiple analysts issued price target adjustments.

• JP Morgan analyst Christopher Horvers maintained an Overweight rating on Costco and lowered the price target from $1160 to $1050.
• Telsey Advisory Group analyst Joseph Feldman maintained an Outperform rating on Costco and maintained a $1100 price target.

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COST Price Action: At the time of writing, Costco shares are trading 2.67% lower at $918.10, according to data from Benzinga Pro.

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