Costco Wholesale Corporation (COST) shares are under pressure Friday, even though the warehouse retailer just delivered a solid earnings beat. Sometimes Wall Street works in mysterious ways.

The company reported first-quarter results Thursday after the closing bell, and the numbers looked pretty good on paper. Costco posted earnings per share of $4.50, comfortably ahead of the $4.27 consensus. Revenue came in at $67.30 billion, also topping expectations of $67.13 billion.

The Details Behind The Numbers

Net sales climbed 8.2% compared to last year, which is solid growth for a company of Costco's size. Comparable sales—a key metric for retailers that strips out the impact of new store openings—rose 6.4% year-over-year. Breaking that down by geography: U.S. comps were up 5.9%, Canada saw 6.5% growth, and other international markets posted the strongest performance at 8.8%.

Net income reached $2.00 billion for the quarter, up from $1.80 billion in the same period last year. That's meaningful improvement on the bottom line.

One technical note: the results included a $72 million tax benefit related to stock-based compensation, which was actually smaller than the $100 million benefit from the year-ago quarter.

Analyst Take

Following the earnings release, Bernstein analyst Zhihan Ma maintained an Outperform rating on Costco and bumped up the price target from $1,134 to $1,146, signaling continued confidence in the company's trajectory.

At the time of writing, Costco shares are trading 1.30% lower at $872.97.