Thursday, March 4, 2010

Costco Off 4% on FYQ2 Miss

Barron’s

Shares of Costco (COST) are down $2.38, or 4%, at $58.98 after the big box chain beat fiscal Q2 revenue estimates by a couple hundred million but missed on the bottom line by two cents.

Revenue of $18.74 billion was 11% higher and ahead of the $18.5 billion estimate, while profit per share of 70 cents missed the 72-cent average estimate.

The culprit was a gross profit margin below analysts’ estimates, at 10.67% versus 10.79% expected, and a a rise in operating expenses of 12%, more than expected, according to a quick note out on the items by Brian Sozzi of Wall Street Strategies this morning. Share count rose, too, writes Sozzi, even though the company was probably buying up its shares during the quarter, he muses.

Sozzi’s keeping his “buy” rating on the stock, pointing out that with $4.1 billion generated in the quarter, he thinks the company’s primed to do some buybacks or boost the dividend.

Link to full article: http://blogs.barrons.com/stockstowatchtoday/2010/03/03/costco-off-4-on-fyq2-miss/