Costco’s digital sales rose by 21%, but its share price fell 5%
Costco announced its 6-month 9-day 3quarterly results. Digital sales increased by 21%, and gas station sales reached a record high, but the share price fell 5%. Investors were concerned about the high share price level (P/E ratio of 49times) and margin pressure from price cuts and rising transportation costs.
Costco announced its 6-month 9-day 3quarterly results. The company reported strong results in digital sales and gas station sales. The share price fell 5% on the day of the announcement.
The company said digital sales increased by 21%. During the same period, gas station sales reached a record high. The company reported that these items contributed to strong sales.
The market pointed to the share price level as an issue. The share price was cited as a burden at 49times earnings (P/E ratio of 49times). Some investors considered this level a high valuation.
The company’s results also showed margin pressure. The company said it had lowered the prices of some items. Higher transportation costs also affected margins.
Investors raised concerns about whether gas-station sales were partly attributable to temporary fluctuations in oil prices. These concerns led to discussions about the sustainability of the results. At the same time, a broad stock sell-off followed the release of strong employment data.
The report date is 6 month 9. The earnings announcement and market trends that day were reflected in the stock-price movement. The company will provide separate guidance on any additional disclosures.
Sources: The Motley Fool,Yahoo Finance
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