Costco Stock Falls Despite Earnings Beat. Here's Why
Costco's earnings report showed strong demand for gold bars and silver coins. Here's what you need to know.
 
 
Costco Wholesale (COST) stock is struggling Friday after the membership warehouse's appearance on the earnings calendar. While COST beat revenue and earnings expectations for its fiscal 2024 third quarter, the company kept membership fees unchanged at current rates.
In the 12 weeks ended May 12, Costco's revenue increased 9.1% year-over-year to $58.5 billion. Comparable store sales were up 6.5% when excluding the impacts from changes in gasoline prices and foreign exchange, while e-commerce sales surged 21% on strong demand for gold bars and silver coins.
COST also said its earnings per share (EPS) jumped 29% from the year-ago period to $3.78.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
 
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The top- and bottom-line results cruised past analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $58.1 billion and earnings of $3.70 per share.
When asked on the conference call about a possible membership fee increase, Costco Chief Financial Officer Gary Millerchip said that even though the company is well beyond the typical five years for an increase, it is still evaluating "high inflation and the risk and concern around recession" to determine when the right time will be to raise fees.
Costco also eased concerns about raising the price of its $1.50 hot dogs. Although the company cut off access to non-members earlier this year, Millerchip confirmed in the earnings call that the "price is safe."
Is Costco stock a buy, sell or hold?
Overall, analysts remain generally upbeat toward the retail giant. According to S&P Global Market Intelligence, the consensus analyst target price for COST stock is $805.82, representing implied upside of about 1% to current levels. Meanwhile, the consensus recommendation is a Buy.
Financial services firm UBS is one of the most bullish firms on Costco stock with a Buy rating and a $940 price target.
"COST posted yet another quarterly result which indicated continued significant market share gains and broad-based strength across the business, with its worldwide traffic growing 6% year-over-year, discretionary business outperforming, and its operating margin reaching the highest quarterly level in nearly 24 years," UBS Global Research Michael Lasser said in a report. "We think COST will likely have even more levers to increase its dominance in the retail industry in the coming years."
The $940 price target represents implied upside of about 18% to current levels.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
- 
 Is Mint Mobile's Home Internet a Game-Changer or Just Another Option? Is Mint Mobile's Home Internet a Game-Changer or Just Another Option?Mint Mobile recently unveiled its new home internet service. We break down how it works so you can determine if it's a great value for your needs. 
- 
 How to Add Your Driver’s License or State ID to Google Wallet How to Add Your Driver’s License or State ID to Google WalletStore and use your digital ID securely on your Android device for TSA, age verification and more. 
- 
 Five Downsides of Dividend Investing for Retirees, From a Financial Planner Five Downsides of Dividend Investing for Retirees, From a Financial PlannerCan you rely on dividend-paying stocks for retirement income? You'd have to be extremely wealthy — and even then, the downsides could be considerable. 
- 
 Dow, S&P 500 Slip on December Rate Cut Worries, Nvidia Boosts Nasdaq: Stock Market Today Dow, S&P 500 Slip on December Rate Cut Worries, Nvidia Boosts Nasdaq: Stock Market TodayNvidia became the first company ever to boast a $5 trillion market cap, but it wasn't enough to lift the Dow and the S&P 500. 
- 
 I'm a CPA: Control These Three Levers to Keep Your Retirement on Track I'm a CPA: Control These Three Levers to Keep Your Retirement on TrackThink of investing in terms of time, savings and risk. By carefully monitoring all three, you'll keep your retirement plans heading in the right direction. 
- 
 Stocks Hit Fresh Highs Ahead of the Fed As Earnings Pump Optimism: Stock Market Today Stocks Hit Fresh Highs Ahead of the Fed As Earnings Pump Optimism: Stock Market TodaySHW and UNH were two of the best Dow Jones stocks Tuesday, thanks to solid earnings reports, and MSFT closed with a $4 trillion market cap. 
- 
 Targa Resources, Take-Two Interactive, Boston Scientific: Why Experts Rate These Stocks at Strong Buy Targa Resources, Take-Two Interactive, Boston Scientific: Why Experts Rate These Stocks at Strong BuyWall Street is highly bullish on these three high-quality stocks. 
- 
 Debunking Three Myths About Defined Outcome ETFs (aka Buffered ETFs) Debunking Three Myths About Defined Outcome ETFs (aka Buffered ETFs)Defined outcome ETFs offer a middle ground between traditional equity and fixed-income investments, helping provide downside protection and upside participation. 
- 
 This Is Why Judge Judy Says Details Are Important in Contracts: This Contract Had Holes This Is Why Judge Judy Says Details Are Important in Contracts: This Contract Had HolesA couple's disastrous experience with reclaimed wood flooring led to safety hazards and a lesson in the critical importance of detailed contracts. 
- 
 US-China Trade Hopes Send Stocks to New Highs: Stock Market Today US-China Trade Hopes Send Stocks to New Highs: Stock Market TodayApple and Microsoft are on track to join Nvidia in the $4 trillion market cap club.