Costco misses Wall Street estimates for Q1 sales despite a 17% annualised growth

Costco Wholesale Corp. (NASDAQ: COST) said on Thursday that its net sales came in lower than expected in the fiscal first quarter despite a 17% annualised increase as customer stockpiled items amidst the ongoing Coronavirus pandemic that has so far infected more than 16 million people in the United States and caused a little under 300 thousand deaths.

Costco was volatile initially in extended trading on Thursday but then settled around the same price at which it had closed the regular session. On a year-to-date basis, the Issaquah-based company is now more than 25% up in the stock market after a 35% recovery since its low in March. The price action should company in handy if you are interested in investing in the stock market.

Costco’s Q1 financial results versus analysts’ estimates

Costco said that its net earnings in the first quarter printed at £880 million that translates to £1.97 per share. In the same quarter last year, it had earned £633.61 million or £1.43 per share. The American multinational also highlighted that its net earnings in Q1 included £108.85 million of tax benefits and accounted for a pre-tax expense of £159.15 million attributed to COVID-19-related premium ages.

In terms of net sales, Costco reported a 17% year over year increase in the recent quarter to £31.79 billion versus the year-ago figure of £27.21 billion. Comparable-store sales, the wholesale corporation said, registered a 15.4% annualised growth in Q1. Earlier this week, Costco said that it was extending senior hours indefinitely amidst the rise in new COVID-19 cases.

According to FactSet, experts had forecast the company to register an even higher £34.78 billion of revenue in the first quarter. For earnings per share, they had estimated £1.55. FactSet Consensus for Costco’s same-store sales growth in Q1 stood at 16%.

Other prominent figures in Costco’s earnings report

Other prominent figures included in Costco’s financial report on Thursday include £32.43 billion of total revenue and a massive 86.4% year over year growth in digital sales. In the prior quarter (Q4), Costco had revealed a record £3.14 billion of profit, as per the report published in September.

Costco performed largely upbeat in the stock market last year with an annual gain of roughly 45%. At the time of writing, it is valued at £123.49 billion and has a price to earnings ratio of 41.35.