Costco (NASDAQ:COST) shares experienced a decline of more than 7% on Friday as the company’s second-quarter revenue fell short of market expectations, partially due to reduced demand for high-value items among budget-conscious consumers.
In the face of persistent high inflation and rising interest rates, shoppers have started to cut back on spending for larger purchases such as electronics and furniture. Despite this trend, Costco, known for its bulk sales of essential goods, has somewhat managed to navigate the slowdown.
Nevertheless, adjustments to the fiscal calendar and a drop in gas prices negatively affected the company’s net sales. For Q2, Costco reported a 6% increase in total revenue to $58.44 billion, which did not meet the anticipated $59.16 billion. Despite this, the company’s earnings per share of $3.92 exceeded the forecasted $3.62, buoyed by lower commodity and freight expenses.