Costco on Thursday reported another sturdy — if mixed — quarter, demonstrating that its focus on keeping prices low continues to bring more shoppers to its stores at an uncertain time for the U.S. economy. Total revenue in its second quarter of fiscal year 2025 rose 9% year over year to $63.72 billion, topping Wall Street expectations of $63.13 billion, according to estimates compiled by LSEG. Earnings per share (EPS) in the 12 weeks ended Feb. 16 came in at $4.02, missing the consensus of $4.11, LSEG data showed. The reported figure includes a 13-cent hit from foreign exchange rates, a common theme this earnings season among multinational companies dealing with a strong U.S. dollar. EPS rose 2.6% on an annual basis, though the year-ago period included a $94 million tax benefit. Without it, EPS would’ve been up 8.4%. Costco Why we own it: Costco is the best-run retailer in the world, with a business model focused on offering its members a relatively small universe of products at hard-to-beat prices. Costco has succeeded for decades, but the high inflation of recent years has made the company’s value-focused ethos really shine. Competitors: BJ’s Wholesale , Walmart , fellow Club holding Amazon Last buy: June 15, 2020 Initiation date: Jan. 27, 2020 Bottom line Costco did not report its prettiest quarter, but a Picasso is still a Picasso. Nothing in the numbers or what was said on Thursday’s conference call suggests the best-of-breed retailer has lost a step in both its operations and its appeal to customers who want more bang for the buck and a fun shopping experience. The EPS miss is hardly a back-breaker. Operating margins still expanded on a year-over-year basis for the eighth quarter in a row, albeit at a slightly lower pace than Wall Street expected, and its top-line grew at a hearty 9% clip. Same store sales — often called comparable store sales, or comps — also exceeded expectations during the important holiday quarter. Membership renewal rates also creeped up compared with the first quarter. Shares of Costco were down a little more than 1% in extended trading Thursday. The muted move after earnings is far from unusual with Costco because the company reports sales on a monthly basis, meaning often a lot of the good news is priced into the stock. Indeed, Costco shares were up nearly 4% since its last earnings on Dec. 12 report versus a 5.2% decline in the S & P 500 . COST 1Y mountain Costco’s stock performance over the past 12 months. Costco’s earnings arrive at a time of growing concern on Wall Street about the health of the U.S. economy and the impact of President Donald Trump’s tariff policy on prices and consumer spending. On the earnings call, CFO Gary Millerchip said Costco was not really seeing any change in member behavior compared with the prior few quarters. Members are showing a willingness to spend, but they’re just being choosy about what they spend their money on, he said. That dynamic could be even more pronounced…
Read More: Costco checks plenty of key boxes for investors despite earnings miss
