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(Reuters) – Costco shares fell more than 7% on Friday, after the membership retail chain said it missed second-quarter sales expectations and signaled a negative impact from falling gas prices. It is expected to be the worst day since then.
At least seven brokerages raised their price targets for Costco, but Jefferies’ It had the highest price increase of $905.
“Lower gasoline prices had a negative impact on reported comp sales, with the global average selling price per gallon of gasoline increasing approximately 3.5% year over year,” said Richard Galanti, Costco’s outgoing CFO. It has fallen,” he said.
“We see this kind of situation a lot at Costco because the stock was doing really well leading up to the earnings release,” said Joseph, an analyst at Telsey Advisory Group. He will recover from there.” Feldman said.
At Costco, demand for high-margin products such as home appliances and electronic equipment is also declining. U.S. retail sales fell in January by the most in 10 months as customers remained wary heading into 2024.
But comparable sales, excluding fuel and currency, rose 5.8% as retailers pushed to lower prices on certain products, attracting consumers willing to spend pennies on the dollar. .
“Underlying same-store sales are very strong and foot traffic in our stores is very strong, which is the biggest sign of our health as a retailer,” Feldman added.
The brokerage believes the retailer can attract customers in an uncertain environment and drive revenue growth through strong demand, membership fees and low prices.
Costco stock is currently trading at $728.80, with a median price target of $780, according to LSEG data.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Tasim Zahid)
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