Costco comparable-store sales fall as dollar hurts
11.12.2015 385 views
Shares of Costco Wholesale tumbled after the company reported a fall in comparable-store sales for the third straight quarter as a stronger dollar reduced the value of sales from overseas markets.
Comparable sales, including fuel and foreign currency impacts, fell 1 percent in the first quarter ended Nov 22, 2015. Analysts polled by research firm Consensus Metrix had expected growth of 0.3 percent.
Costco gets almost 30 percent of revenue from outside the United States. The dollar rose about 13 percent against a basket of currencies in the 12 months through November. "These results will probably raise some questions, but we don't think the story has changed at all," UBS retail analyst Michael Lasser wrote in a research note. "The factors that weighed on the company's results are fleeting. We don't think the market should penalize the retailer's shares for them, but if it does we would view it as a compelling buying opportunity."
Kate McShane, Citi managing director, echoed Lasser's sentiments on CNBC's "Squawk Box." In spite of competition from delivery services and declining traffic in the retail sector overall, McShane said Costco's membership model differentiates it from other retailers.
"Costco is really outperforming most retailers, despite this headline this morning," McShane said.
Excluding fuel and foreign exchange impact, comparable-store sales rose 6 percent, above the 5.9 percent growth expected by analysts polled by Consensus Metrix.
Net income attributable to the company rose to $480 million, or $1.09 per share, from $496 million, or $1.12 per share, a year earlier.
Revenue rose 1 percent to $27.22 billion from $26.87 billion a year earlier.
Analysts on an average had expected earnings of $1.17 per share on revenue of $27.57 billion, according to Thomson Reuters I/B/E/S.