By Davit Kirakosyan and Senad Karaahmetovic
Costco (NASDAQ:COST) reported mixed Q2 results. EPS came in at $3.30, better than the consensus estimate of $3.21. Revenue grew 6.5% year-over-year to $54.24 billion, missing the consensus estimate of $55.55B as consumers are limiting their spending on discretionary items because of the continued high inflation.
Shares are down 2.5% in premarket Friday trading.
Q2 comparable sales increased 5.2% (or 6.8% excluding the impacts from changes in gasoline prices and foreign exchange), with U.S. up 5.7%, Canada up 3.5%, and Other International up 3.8%.
Bernstein analysts cut the price target by $18 to $568 per share after the company delivered a "solid" quarter.
"We continue to like the outlook, especially for med- to long-term investors... The growth outlook remains positive," they wrote to clients.
Oppenheimer analysts believe the move lower in COST shares after results is "primarily due to the lack of a membership fee hike, which had been anticipated with this report."
"Consistent with our playbook lately, we would take advantage of weakness vs. chasing strength as Street numbers still appear high to us. Interest income is a bit of a wildcard in our modeling due to the potential for a special dividend down the road, and we have modeled conservatively from a longer-term perspective. We still expect a membership fee hike and special dividend in coming quarters," the analysts told the broker's clients.