COST Stock Remains Unshaken After Q2 Earnings Beat Wall Street Estimates: Company Says No Plans For Special Dividend Now

Shares of Costco Wholesale Corporation (COST) fell marginally after hours on Thursday after the company announced second quarter earnings above Wall Street estimates.

For Q2, the warehouse retailer reported net income of $4.58 per diluted share, compared to $4.02 per diluted share, last year, and above an analyst estimate of $4.55 per share, according to Fiscal AI.

Net sales for the quarter increased 9.1% to $68.24 billion, while total revenue came in at $69.60 billion, above analysts’ estimate of $69.27 billion.

Special Dividend In Sight?

Asked about the company’s plans to give out a special dividend, the company said that it has no plans yet.

“You know, what I'd say on special dividend is while our cash balances are back to the levels that they were pre the last special dividend, I think it's important to remember that, you know, to achieve a similar yield to last time when our stock was at $660, the cash would need to be greater,” a company executive said. “We'll continue to review the question of special dividend with our board, but there are no plans that we could share at this time around a plan for special dividend.”

The company last announced a $15 special dividend in December 2023.

Costco Membership In Q2

Membership fees totaled $1.36 billion during the quarter, compared to $1.19 billion in the corresponding period last year, Costco said.

Paid memberships increased 4.8% to 82.1 million with worldwide membership renewal rate at 89.7%.

Digital Impact

Same store sales for the quarter rose 6.7% on an adjusted basis, excluding impacts from changes in gasoline prices and foreign exchange, the company said.

Digitally-enabled comparable sales rose 22.6% in the quarter, with ecommerce site traffic up 32%, the company said. Ecommerce average order value also rose 15% in the period, the company added.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around COST rose from ‘bearish’ to ‘bullish’ territory over the past 24 hours while message volume increased from ‘low’ to ‘extremely high’ levels.

COST stock has fallen over 6% over the past 12 months.  

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Editor's Note: The story has been updated to reflect accurate Q2 revenue estimates.