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Costco’s Q2 earnings thump estimates as revenue comes in slightly lower than expected

Costco (COST) once again bulked up its earnings as it reported fiscal 2024 Q2 results.

The wholesale club posted adjusted earnings per share (EPS) of $3.92, soundly beating estimates of $3.62. Revenue came in at $58.44 billion, up 5.7% year over year, but slightly lower than expectations of $59.04 billion, per Bloomberg data.

Same-store sales, excluding gas and foreign exchange, jumped 5.8%.

In the US, same-store sales growth came in higher than expected at 4.8%. Canada beat estimates with 9% same-store sales growth, while international stores posted a higher-than-expected increase of 8.2%.

Membership fees, a key revenue stream, came in at $1.11 billion, up from $1.03 billion a year ago. That’s also a jump from Q1, which brought in $1.08 billion.

TETERBORO, NJ - JUNE 28: Customers check out their purchases inside a Costco store on June 28, 2023 in Teterboro, New Jersey. Costco is cracking down on membership card sharing at its stores. (Photo by Kena Betancur/VIEWpress)

Customers check out their purchases inside a Costco store on June 28, 2023, in Teterboro, N.J. Costco is cracking down on membership card sharing at its stores. (Kena Betancur/VIEWpress) (VIEW press via Getty Images)

A Costco Gold Star membership costs $60 per year, while an Executive Membership goes for $120. Some on the Street predicted last year that Costco would raise fees this summer.

Prior to earnings, Telsey Advisory Group senior managing director Joe Feldman told Yahoo Finance Live that “Costco is leading the way right now” as it continues to perform well, catering to a “a more affluent consumer” who seeks value.

E-commerce continues to gain momentum as well. In Q2, the company saw digital sales grow more than 18% compared to a year ago.

Costco’s shares are up over 60% compared to last year, handily beating the S&P 500’s (^GSPC) 29% gain. The retailer currently has 875 warehouses, with 603 locations in the US and Puerto Rico.

The earnings rundown:

Here’s what Costco reported in its fiscal second quarter versus Wall Street estimates, according to Bloomberg data:

  • Net sales: $58.44 billion versus $59.04 billion

  • Adjusted EPS: $3.92 versus $3.62 expected

  • Same-store sales growth: 5.8% versus 4.65% expected

    • US same-store sales growth: 4.8% versus 4.09% expected

    • Canada same-store sales growth: 9% versus 6.31% expected

    • Other international: 8.2% versus 6.17% expected

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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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