Costco misses revenue expectations for Q1 2023, Canadian sales up 2.4%

Costco Wholesale Corp.’s growth slowed in the first quarter of fiscal 2023 with revenue coming in below analyst expectations.

The company reported US$54.44 billion in revenue, up from $50.36 billion in 2021. Analysts were expecting Costco to post $54.7 billion in revenue for Q1 2023 after several years of strong results. 

Chief Financial Officer Richard Galanti said the club is seeing weakness  primarily with big-ticket discretionary items. 

“It rains on all of us during these tougher times, particularly with bigger ticket discretionary items,” he told analysts on a call Friday (Dec. 9). “We're comparing against some huge increases a year ago, frankly, over the last two or three years… And that's where we've seen some of the slowdown.”

Net sales for the quarter increased 8.1% to $53.44 billion compared to $49.42 billion last year. Comparable sales were up 2.4% in Canada while e-commerce declined 3.7%. 

Costco raked in $1 billion in membership fees compared to $946 million in 2021.

Net income for the quarter was $1.36 billion ($3.07 per diluted share), compared to $1.32 billion ($2.98 per diluted share) last year. 

This year’s results included a charge of $93 million related to the downsizing of Costco’s charter shipping activities, and a tax benefit of $53 million, related to stock-based compensation.