Costco Q3 earnings miss estimates amid slower-than-expected sales growth

Costco (COST) reported fiscal 2023 third-quarter earnings results Thursday after market close that missed analysts' expectations.

Last quarter, same-stores growth slowed compared to previous quarters with people spending less, particularly on big-ticket items, amid higher grocery prices. Total sales for the quarter increased 1.9% compared to last year, to $52.60 billion.

Here's what Costco reported, compared to Wall Street estimates, based on Bloomberg consensus data:

Revenue: $53.65 billion versus $54.66 billion expected

Adjusted earnings per share: $2.93 versus $3.30 expected

Same-store sales: up 0.30 % versus 2.91% expected

United States: down 0.1% versus up 2.44 expected

Canada: down 1.0% versus up 1.30 expected

Other international: up 4.10% versus up 4.48%

Its e-commerce sales also came in lower, down 10.0%. Currently, it operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

The company's international business continues to pick up momentum. As of Q3, there are 853 warehouses, including 587 in the U.S. 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 as it ramps up plans to grow its presence there, two in France, and one each in Iceland, New Zealand and Sweden.

Membership fees, a key revenue stream for the wholesale retailer, brought in $1.04 billion, a tick lower than Wall Street estimates of $1.05 billion.

The company didn't indicate it would raise membership fees in the imminent future. However, in a note , UBS Analyst Michael Lasser, who has a Buy rating on shares, said now is the right time to raise fees, despite consumer wallets' being stretched. "This will be a key focus this quarter. We think there's a good chance that COST will bump its Gold Star Membership fee by $5 and its Executive Membership fee by $10 either this quarter or next."

Costco last raised membership prices — a Costco Gold Star membership costs $60 per year and an Executive Membership goes for $120 — in June 2017. The company typically raises prices every 5 years and seven months on average, which suggests the next hike is imminent.

As of Wednesday, there are 27 Buys, 14 Holds and 0 Sells on shares of Costco.

This report comes as shares of Costco are up 5.8% year-to-date, outpacing its competitors. Shares of Sam's Club's parent company Walmart (WMT) are up 3.5% so far this year, and shares of BJ's are down 2.9% after it saw Q1 same-store sales growth come in shy of expectations.

Meanwhile, big box retailers Target (TGT) and Walmart (WMT) beat same-store sales estimates in their recent quarterly results but also showed a similar slowdown in discretionary sales.

Minneapolis, Minnesota, Costco Business Center. Costco is a members-only warehouse selling everything from groceries to electronics. (Photo by: Michael Siluk/UCG/Universal Images Group via Getty Images)—

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here

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