Shares of Costco Fall After Mixed Earnings and Warnings About Tariffs

Bram Berkowitz, The Motley Fool

Fri, Mar 7, 2025, 8:29 AM 2 min read

Shares of Costco (NASDAQ: COST) traded 6.4% lower, arsenic of 10:14 a.m. ET, aft the ample rank retailer reported mixed net results. Management besides made comments astir the interaction of tariffs connected its concern and the retail assemblage arsenic a whole.

Costco reported net per stock of $4.02 for its 2nd fiscal 4th of 2025, missing Wall Street expert estimates by $0.09. Revenue came successful astatine $63.7 billion, beating estimates of $63.13 billion.

On the net call, absorption said that astir one-third of Costco's income successful the U.S. are imported, and little than fractional of that fig are products from China, Mexico and Canada. Management further said that portion the concern continues to germinate rapidly, it volition enactment hard to lessen the interaction of higher prices connected its customers.

Management besides said that tariffs would beryllium felt by the full sector. "As we say, erstwhile it rains, it rains connected everyone specified arsenic a tariff that we're each adjacent there, and I consciousness similar our radical are precise well-equipped to woody with thing coming our mode with our reduced SKU (stock keeping units) model, and we person large partnerships with our suppliers and those items are precise important to them arsenic well," CFO Gary Millerchip said connected the call.

Costco raised yearly rank fees past September for the archetypal clip since 2017. In the 2nd fiscal quarter, absorption said the summation contributed astir 3% to interest income, but that astir of the payment from higher rank fees volition travel implicit the adjacent 4 quarters.

As galore know, Costco experienced a important rerating successful 2024. Even aft the sell-off successful caller weeks, the banal inactive trades astatine 53 times guardant earnings. The institution is good run, but due to the fact that of the elevated valuation and the ongoing tariff situation, I'm not rushing to bargain the banal conscionable yet.

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