Costco a victim of inflation after mixed Q2 report

An ongoing slump in e-commerce sales is just one of the factors behind a mixed second quarter financial report for Costco that came in slightly below expectations in terms of total revenue. Market experts also are claiming consumers are cooling off their spending when it comes to discretionary items due to inflation.

The retailer was calling for total second quarter revenue of just over $55.5 billion, but registered $55.27 billion. However, same-store sales in the U.S. were up 5.8%, a touch above a 5.56% prediction, and February net sales came in at just over $17 billion, which is a 4.7% rise compared to $16.29 billion in February 2022.

E-commerce sales dipped 11.2% in February while quarterly e-commerce business suffered a 9.6% loss.

Wall Street did not handle the earnings report well, as Costco shares were down 2% at the end of trading.

The start of the third quarter also is a bit sluggish. In February, U.S. sales were up 3.4%.

Costco is due for a membership fee increase. The company has typically raised the cost every five years and seven months, which would put the next increase to hit members now. Officials did not comment on such a move during its quarterly earnings report. Membership fees pulled in $1.03 billion, a 6.3% raise compared to a year ago. Rival Sam’s Club, which is owned by Walmart, recently upped membership dues from $45 to $50 ($100 to $110 for Plus members).

Related:Costco Q1 profits inch up on 8.1% sales gain

Visits to grocery stores, dollar stores and superstores were down in the fourth quarter of 2022, compared with the fourth quarter of 2021, with a few exceptions, according to data from Placer.ai.

The research firm attributed the declines in part to the exceptionally strong performance these retailers had in the last few months of 2021, as pent-up demand drove shoppers back to stores and pandemic concerns eased. These retailers all showed Q4 gains when compared with the pre-pandemic traffic of Q4 2019, according to the Placer.ai foot-traffic data: