Retail stock under pressure: Costco Wholesale Corporation (NASDAQ: COST)

Free $100 Forex No-Deposit Bonus

Costco Wholesale Corporation (NASDAQ: COST) stock lost over 1.12% on 29th May, 2020 (as of 10:04 am GMT-4; Source: Google finance) after the company posted lower than expected results for the third quarter of FY 20. The company has reported the net income for the third quarter was $838 million, which was negatively affected due to $283 million pretax, from incremental wage and sanitation costs related to COVID-19. This is compared to last year’s reported third quarter net income of $906 million, which included the benefit of a non-recurring tax item of $73 million. Further, in the third quarter of fiscal 2020 total capex was approximately $626 million and the estimated CapEx for all of fiscal 2020 is currently in the $2.7 billion to $2.9 billion range.

COST in the third quarter of FY 20 has reported the adjusted earnings per share of $1.89, missing the analysts’ estimates for the adjusted earnings per share of $2.04. The company had reported the adjusted revenue growth of 7.3 percent to $37.27 billion in the third quarter of FY 20, missing the analysts’ estimates for revenue of $37.52 billion. On a same-store comparable sales basis for the third quarter, for the 12 weeks on a reported basis, the U.S. was at 5.9%. In terms of traffic, the company’s shopping frequency had declined in the third quarter worldwide by 4.1% and in the U.S. by 2.0%. The average transaction or ticket was up 9.3% during the third quarter and the 9.3% does include the negative impacts from gas deflation and FX. The company has reported higher gross margin year-over-year by 54 basis points on a reported basis, coming in at 11.53%, up from 10.99%.

Additionally, the company has declared a quarterly cash dividend on Costco common stock and approved a quarterly increase from 65 to 70 cents per share, or $2.80 on an annualized basis. The dividend was payable May 15, 2020, to shareholders of record at the close of business on May 1, 2020.

Meanwhile, the company had priced its offering of $4 billion total principal amount of senior unsecured notes. The company plans to use the net proceeds from the offering to repay at or prior to maturity all of our 2.15% Senior Notes due May 2021, in an aggregate principal amount of $1 billion, as well as all of the 2.25% Senior Notes due February, 2022, in an aggregate principal amount of $500 million. The company will be using remaining proceeds for general corporate purposes.

Copyright © 2020. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.