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<p>Online sales at Costco Wholesale Corp. (NASDAQ: COST) have faltered badly, contributing to poor quarterly results. In a world where online sales continue to be the future of retail, its e-commerce revenue dropped 3.7% in the most recently reported quarter. It is a sign that Costco’s management continues to move the company in the wrong direction.</p>
<p>Costco’s revenue rose only 8.1% to $53.44. Earnings inched up from $2.98 per share to $3.07. The only bright spot in the figures was comparable store sales in the United States, which were up 9.2%.</p>
<p>According to Barron’s, “Investors had been wary headed into Costco’s first-quarter earnings print after a weaker-than-expected November sales report that surprised investors last week. The results released Thursday amplified those concerns.”</p>
<p>Wall Street has turned against Costco’s subscription model. While the annual cost to shop at Costco may be a key to recurring revenue, it may dissuade consumers from visiting its stores as well.</p>
<p>Costco’s stock is down 15% this year. That compares to 16% for the S&#038;P 500. Walmart, which has lower income customers than Costco, has posted a share price increase of 3% over the period. Dollar General’s shares have risen 5%.</p>
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<p>Online sales have been the retail wave of the future since Amazon became successful in the 2000s. Amazon has become the second-largest retailer in America (after Walmart) and one of the biggest companies in the country based on annual sales.</p>
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<p>Disappointed investors have not been able to unlock the reason Costco’s online numbers are so terrible. Its higher-end shoppers should be seen to be ideal candidates for online activity. As Costco moves into the holiday season, the need for sales outside its stores becomes even more important.</p>
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Costco’s Online Business Craters – Darlinez News.
