Ultimate News

Tags

Costco's shares sink more than 6% after more grocery competition leads to earnings miss

Shares of Costco Wholesale sink after the company reports weaker-than-expected earnings for its first quarter. The wholesaler blames more rivals in the fresh-grocery business for putting pressure on its profit margins.
People shop at the low cost, high volume supermarket warehouse Costco in Marina Del Rey, California. 

Gabriel Bouys | AFP | Getty Images

People shop at the low cost, high volume supermarket warehouse Costco in Marina Del Rey, California. 

Shares of Costco Wholesale skidded 6.8 percent Friday after the company reported weaker-than-expected earnings amid increased competition.

The fresh-grocery business is getting increasingly more competitive, putting more pressure on Costco's profit margins as it tries to keep up with rivals like Amazon's Whole Foods and Walmart's Sam's Club. Costco's stock is up 21.7 percent from the year, holding its own against those retail giants, whose market values dwarf the wholesaler's $99.3 billion.

"There's been a little bit more retail competitive pressure out there, not only from supermarkets but Sam's as well," CFO Richard Galanti said during the quarterly conference call Thursday. "We've got good fresh sales numbers, but we — like others — our competitors are working in a little lower margin."

The company earned $1.61 per share during its first quarter, excluding certain items, missing Refinitiv estimates of $1.62 per share by a penny.

Costco generated better-than-expected revenue, $35.1 billion, beating Wall Street estimates of $34.8 billion.

Original Link...


Tags: None
0 comments
Report Print

Read On: