Shares of Costco (COST) were trading lower on Thursday after the warehouse club giant reported that June same-store sales fell a worse-than-expected 1%. Analysts expected comparable sales to decline just 0.1%. Currency fluctuations sent international same-store sales down 8% during the month, while U.S. sales rose just 3%, held back by gas price deflation. When adjusted for both currency fluctuations and gas price deflation, international and U.S. comparable sales each rose by 6%. Shares of Costco have underperformed the S&P 500 since April — and some of that decline may be tied to concerns about the company’s gas business, according to TheStreet’s Brian Sozzi. Gas profits have been strong, according to CFO Richard Galanti on a May 28 earnings call, but as gas prices level off, he said profit comparisons will be tougher going forward. However, solid sales in Costco’s hardlines and softlines businesses suggest the company’s profit outlook may not be as weak as some may expect.
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