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How to trade Costco and other consumer stocks

Since a number of consumer stocks took a hit this quarter, "Fast Money" traders discussed some of the factors contributing to these declines.

Costco's stock slipped Thursday, a day after the company said its fiscal second-quarter profit fell nearly 9 percent as costs rose.

Though traders said the warehouse club operator has outperformed relative to Wal-Mart and Target, they noted it was not a great result.

"There were a whole host of things," trader Dan Nathan said. "FX hit them. Obviously lower gas prices — they sell a lot of gas. That hurt the numbers here."

Still, if Target continues to trade in the mid-70s that would be "the way to go," and investors should then "fade Costco," he contended.

Trader Steve Grasso, meanwhile, noted that Costco's earnings results were definitely weak.

"Costco probably will still go lower," Grasso said.


Guy Adami

Guy Adami is long CELG, EXAS, GDX,INTC, Guy Adami's wife, Linda Snow, works at Merck.

Steve Grasso

Steve is long AAPL, BA, BAC, CC, DD, DIS, DECK, EVGN, KBH, MJNA, MU, OLN, PFE, PHM, T, TWTR, GDX firm is long CXO, OXY, BP, CVX, RIG, FCX, AMZN kids own EFA, EFG, EWJ, IJR, SPY.

Dan Nathan

Dan is long PFE buy-write, long TWTR, long UUP March calls, long GE May 28 puts, long JPM April puts, long XLP March put spread, long XRT March puts, long XLB March puts, long HD put butterfly, long QQQ puts, long INTC March/April put spread.

David Seaburg

Opinions expressed by David Seaburg are solely his own and do not reflect the views and opinions of Cowen Group, Inc.