Costco (COST) shares were just below the flatline in pre-market trading on Friday, despite the US warehouse retailer posting quarterly results that beat Wall Street expectations. The company's results were buoyed by stronger e-commerce sales and higher membership revenue.
For the three months ending 11 May, net income rose to $1.90bn (£1.41bn), or $4.28 per share, compared with $1.68bn, or $3.78 per share, in the same period a year earlier. Revenue also climbed from $58.52bn in the year-ago quarter, supported by an 8% increase in comparable sales — a key retail metric that excludes fluctuations from new store openings or closures.
Online sales were particularly strong, rising nearly 16% from a year earlier when excluding the impact of fuel prices and currency movements.
“Costco’s (COST) results suggest the company is performing strongly, though perhaps not across the board,” said Adam Vettese, market analyst at investment platform eToro. “Sales have beaten expectations, showing a spike in e-commerce and membership fees, which help foster that exclusivity of being part of the Costco club, also ticking the right way.”
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Vettese cautioned that macroeconomic pressures could still weigh on performance. “Last quarter was a miss due to cost pressures, and with the threat of tariffs looming, a business like Costco (COST) where margins are crucial does not want to feel that squeeze,” he said.
“Some might view Costco (COST) as a fairly safe defensive play, but investors should also be mindful about increased costs or outside interference playing havoc with those carefully engineered margins.
“That said, those who have held Costco (COST) shares the last couple of years will be likely pleased with the performance. With ongoing consumer uncertainty, Costco’s recent track record may continue to attract investor interest.”
Shares in Dell (DELL) gained in pre-market trading on Friday after the company posted first-quarter earnings that fell short of Wall Street forecasts but delivered stronger-than-expected revenue and issued a bullish outlook for the current quarter.
The computer and IT infrastructure group said it expects adjusted earnings of $2.25 per share in the second quarter, alongside revenue in the range of $28.5bn to $29.5bn, ahead of analyst expectations compiled by LSEG.
Company executives attributed the upbeat forecast to robust demand for artificial intelligence-related infrastructure, which tends to carry higher margins than Dell’s (DELL) traditional systems. Dell expects to ship $7bn in AI systems this quarter alone.
