Costco second-quarter revenue misses estimates as consumers curb spending

Investing.com -- Shares in Costco (NASDAQ:COST) fell in early U.S. trading after the members-only wholesale retailer reported second-quarter revenue that missed expectations due in part to weaker demand for higher-priced items from cost-conscious shoppers.

Consumers, weighed down by high inflation and elevated interest rates, have recently moved to dial back spending on big-ticket items like electronics and furniture. Costco, which specializes in selling essential goods in bulk, has been somewhat immune to this slowdown.

However, the firm said a shift in the fiscal calendar and a decrease in gasoline prices hit net sales. Total quarterly revenue edged up by 6% to $58.44 billion in the three months ended on Feb. 19, but were below estimates of $59.16 billion, according to LSEG data cited by Reuters.

Analysts at Stifel noted that, with inflation relatively flat in the quarter, Costco began to reduce prices where possible during the quarter, including on items like reading glasses and batteries.

Yet earnings per share of $3.92 still topped projections of $3.62 thanks to a reduction in commodity and freight costs.

Analysts at Jefferies argued that the company still offers a "strong value offering," citing high rates of membership renewal and plans to eventually increase its club fees.

Yasin Ebrahim contributed to this report.