Disclaimer: Whatever I say or post doesn't act as financial advice, so please do your due diligence before making any decision.
On March 6, 2025, Costco Wholesale Corporation (NASDAQ: COST) released its fiscal second-quarter earnings report for February 16, 2025. The company reported net sales of $63.72 billion, a 9% year-over-year increase, surpassing analyst expectations. However, earnings per share (EPS) came in at $4.02, slightly missing the projected $4.09.
Key highlights from the report include:
Same-Store Sales Growth: Increased by 6.8%, exceeding forecasts.
E-commerce Performance: Experienced a significant growth of 20.9%.
Membership Fee Revenue: Rose by 7% year-over-year to $1.19 billion, attributed to the membership fee hike introduced in September 2024.
Despite the revenue growth, net income was impacted by rising merchandise costs and increased supply chain expenses due to tariff uncertainties. CEO Ron Vachris noted that tariffs affect all retailers equally and expressed concerns that inflation and tariffs might make consumers more selective in their spending.
Following the earnings release, Costco's stock declined by 1.5% in after-hours trading, though it has risen by nearly 33% over the past year and recently reached a record high.
It seems like the tariffs and uncertainty surrounding it is hitting the consumer discretionary sector hard. With that, it is affecting consumer spending as well, with people tightning up their purse strings and being more stringent on their spending.
With that said, I am actually glad that there is a huge correction to the downside for Costco as I do think its price was too inflated relative to its instrinsic value. So I will be watching closely to sell a put spread once the tide changes or to add on positions on COST.
@madluvyz - Specialist in using TA to sell options and swing trade.šŗ
Comments