By Senad Karaahmetovic
Costco (NASDAQ:COST) shares are down 2% in pre-market despite the company reporting a better-than-expected Q3 EPS and comparable sales growth, driving up its shares in extended trading Thursday.
COST reported Q3 EPS of $3.04, compared to $2.75 in the year-ago period, while the analyst consensus was $3.02. Total revenue came in at $52.60 billion, above the consensus projection of $51.5 billion. Net sales stood at $51.61 billion, also above the expectations of $50.45 billion.
Total company comparable sales excluding fuel, in constant currency, grew 10.8% in the period, compared to a 15.1% growth in the year-ago quarter and the expected growth of 9.37%.
COST reported $984 million in membership fees, up 9.2% YoY and topping the consensus estimates of $971.5 million.
UBS analyst Michael Lasser cut the price target to $595.00 per share from $625.00 and said the results “s featured more positives than negatives.”
Lasser expects COST “to take further market share, and note that its MFI gives it a degree of consistency that most retailers can't match.” For him, the risk/reward continues to skew towards the upside.
Citi analyst Paul Lejuez also slashed the price target as he goes from $590.00 to $510.00 and remains Neutral-rated.
“COST is well positioned for this type of environment with its attractive prices and strong value proposition. We believe strong results should continue, but we still struggle with the multiple, which leaves little room for error,” Lejuez told clients in a note.