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Costco stock drops following weak November sales data

Shares of Costco fell after November data revealed a drop in sales.

Video transcript

DAVE BRIGGS: COST is my play. Costco, of course. Shares sliding today on news of weaker than expected November sales. Costco said sales ending November 27, which included Black Friday, rose 5.7% to 19.17 billion. That's, though, a sharp decline from the 7.7% increase in October and the 10% increase in September.

That echoes what we heard from Target CEO Brian Cornell recently, saying he saw consumers begin to change their behavior. Quote, "Working with their budget, shopping very carefully, looking for value," and that's what we saw really across those five days between Thanksgiving and Cyber Monday.

Costco may have also suffered, though, from the 30% decline in gas prices we've seen recently. They will report earnings one week from today on the 8th. Expectations for 3 bucks, $0.12 per share on 53.92 billion. Shares of Costco, as you can see, down 6.6% on this, and down 10% this year. Pretty good indicator of the economy of the consumer, Seana.

SEANA SMITH: Yeah, certainly a worrisome sign, especially since Costco has been able to weather a lot of the volatility that we've seen prior to November. So the drop there will be very interesting to hear-- to wait to see what we do hear from the company when they do report earnings next week.

Online sales, though, Dave, I wanted to pointed out, a 10% decline in e-commerce sales for Costco during that period. So another sign just in terms of consumers pulling back their spending, inflation, prices remaining very, very high. And as the economy certainly seems like it's continuing to weaken, this could be a worsened sign here just in terms of what we could see over the next couple of months.