Is the Costco shopping cart half full or half empty?.It depends on which stock analysts are talking after the wholesaling giant missed Wall Street expectations in reporting lower than expected third quarter results..Despite higher sales and memberships, Issaquah, Washington-based Costco reported net earnings of $2.93 per share on revenues of $53.6 billion, missing analyst expectations of $3.32 and $54.61 billion in revenues (all figures are US dollars)..Net earnings fell to $1.3 billion compared to $1.35 billion in the same quarter of last year. Merchandise and administrative costs were up about 1% while E-commerce sales fell 9% in the quarter.. Costco stock chartCostco shares took a hit on its Q3 earnings before recovering Friday. .This despite the fact net sales — after stripping out currency fluctuations and changes in gasoline prices — increased 1.8% in the US and 7.8% in Canada. International sales — which include three warehouses in China — were up an even more impressive 8.4%..After including those items, sales actually fell about 1% in Canada and .1% in the US..Results included a one-time charge of 50 cents per share to discontinue its charter shipping business. During the pandemic, Costco was one of several large retailers to charter its own vessels to circumvent supply chain bottlenecks in securing merchandise from overseas, specifically Asia..Like other major US retailers such as Walmart, Costco’s US sales numbers were impacted by lower sales of big-ticket discretionary items such as electronics and TVs as consumers spent more on essentials like mega-sized toilet paper and toothpaste in the face of higher inflation..Market reaction to the report was mixed. .Goldman Sachs reiterated a ‘buy’ rating on the stock and increased its share price target to $545 per share..According to Goldman: "We continue to have confidence in Costco's value proposition resonating with consumers, while the company's scale and limited SKU (stock keeping unit) model enable it to manage cost pressures.”.But investment bank Roth Capital Partners cut their own price forecast to $482 and maintained a ‘neutral’ rating, citing inflationary pressures and increased competition in the retail space.."With a membership fee increase seeming less imminent and the commentary around quickly sharing deflation, we continue to think valuation is stretched," they wrote in a note..Costco has 123 million members worldwide. According to its investment profile, it operates 853 warehouses, including: 587 in the United States and Puerto Rico; 107 in Canada; 40 in Mexico, 32 in Japan; 29 in the United Kingdom; 18 in Korea; 14 in Taiwan; 14 in Australia; four in Spain; three in China; two in France; and one each in Iceland, New Zealand and Sweden. .After falling 1% in pre-market trading, Costco shares were up nearly 3% or $12.97 on the NASDAQ market, to $499.52.
