Costco slips after profits, warning of "material weakness"

Shares of Costco Wholesale Corporation (COST) slipped late into the session on Thursday after the company released its latest financial results and warned that it expected to announce a "significant weakness" in its internal controls.

Costco said that "the weakness concerns the general controls of information technology in the areas of user access and program change management on some information technology systems. who support the company's financial reporting processes ".

Shares fell 2.8% to 225.28 at the end of the session after slipping as early as $ 222.

The company said its fourth-quarter net profit was $ 1.04 billion, or $ 2.36 a share, compared to $ 919 million, or $ 2.08 for the same period last year. The company said its net sales, excluding membership fees, reached $ 43.4 billion, up from $ 41.4 billion a year ago. The results missed the analyst's estimate of $ 2.40 per share.

Online sales, which have recently been a strong sector, increased by 26.2% year-on-year.

While net sales grew nearly 5% from one year to the next, operating expenses increased slightly, resulting in a drop in operating profit from the company $ 4 million, to $ 1.45 billion.

Costco's online sales were a significant part of the 8.3% increase in sales in August, which was above the industry's overall growth rate of between 4% and 5%. recently commented on Greg Melich, an analyst with Moffett Nathanson.

Although Costco's online sales grew strongly in the quarter, they still lag behind Walmart's digital businesses, which recorded a 40% increase in sales for the quarter ended August.

The results report did not reveal any updates to the company's forecasts.

Prior to the release of the report, Costco shares had gained about 23% since the beginning of the year.

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