2nd UPDATE:Costco Warns 2Q EPS Likely Well Below Street View
2009年2月5日 - 4:07AM
Dow Jones News
Costco Wholesale Corp. (COST) warned Wednesday that its fiscal
second-quarter earnings are likely to come in "substantially below"
analysts' expectations as sales and margins have been hurt by
general economic conditions.
Chief Financial Officer Richard Galanti also said the company
wouldn't be issuing earnings guidance for the remainder of the
fiscal year "given the uncertainties surrounding the economy,
including consumer behavior." The company's fiscal second quarter
ended on Feb. 15.
In a statement, Galanti said that margins have been hit
primarily in the non-food and merchandise categories because of
"aggressive merchandise pricing...to drive sales and increase
market share, particularly during the first four weeks of the
fiscal quarter."
Analysts polled by Thomson Reuters expect earnings of 70 cents
per share when Costco releases its financial statements for the
quarter on March 4.
Following its fiscal first-quarter financial report in December,
Costco said it doesn't expect to meet second-quarter projections,
but the uncertainty around how bad it's going to be sent shares of
the warehouse club down 6.2% Wednesday to $43.27 and weighed
heavily on the broader retail sector.
Costco has also been hit by lower year-over-year profits from
its gasoline business and the strengthening U.S. dollar, which ate
into gains from its international operations.
The company said its wholesale same-store sales fell 2% in
January from a year earlier. Same-store sales in the U.S. were flat
while international sales were down 9%.
While Costco has held up relatively well in light of the
economic downturn, industry watchers said the announcement didn't
come as a complete surprise. A painful combination of mounting
unemployment numbers and losses in the stock market have weighed
heavily on consumers.
"When the consumer is being hurt like this, there aren't a lot
of places to hide," and even strong companies will be hit, said
Howard Davidowitz, chairman of Davidowitz & Associates, a
national retail consulting and investment banking firm based in New
York.
"Costco is a bit of a victim of its own success," said FTN
Equity Capital Markets analyst Charles Cerankosky. In the past, the
company has been successful in luring customers with a wide range
of discretionary items ranging from electronics to jewelry to
apparel. But as the economy has worsened, customers have cut back
on buying such unnecessary goods.
"They have historically done better [with discretionary
merchandise] so now when those products aren't moving off the
shelves, their bottom line is going to get hurt," Cerankosky
said.
Costco's announcement also follows recent negative trends at its
competitors. Its peers have yet to release January same-store sales
number, but the previous month's results indicated a slowdown at
other warehouse clubs. BJ's Wholesale Club Inc. (BJ), which
reported seven straight months of double-digit growth in same-store
sales through October thanks in part to then-high gasoline prices,
struggled in December. Its 1.6% growth was the lowest in a year.
Wal-Mart Stores Inc.'s (WMT) Sam's Club also saw a decline in
December as same-store sales including fuel fell 3.2%.
-By Kejal Vyas; Dow Jones Newswires; 201-938-5460,
kejal.vyas@dowjones.com