On Thursday, Costco reported quarterly earnings and revenue that surpassed expectations due to an 8% rise in sales.
Here’s a comparison of the warehouse club retailer’s performance in its fiscal third quarter with Wall Street’s predictions, derived from a survey of analysts by LSEG:
Earnings per share: $4.28 compared to an expected $4.24
Revenue: $63.21 billion against the anticipated $63.19 billion.
Costco market performance
For the three-month span ending May 11, Costco’s net income grew to $1.90 billion, translating to $4.28 per share, compared to last year’s $1.68 billion, or $3.78 per share. Revenue increased from $58.52 billion in the same quarter last year.
Comparable sales, a key industry measure that excludes one-off factors like store openings and closures, saw an 8% rise, and e-commerce sales climbed nearly 16% relative to the prior year period, excluding gas and the effect of currency fluctuations.
As tariffs heighten economic concerns and may increase consumer prices, Costco could gain from these changes. Unpredictable tariff policies might draw more customers to Costco, known for competitive pricing and bulk discounts, and encourage their membership renewals. The club’s offerings also include discounted gas and groceries, which consistently attract customers even when consumer spending diminishes. Additionally, Costco’s large scale gives it a stronger position for price negotiations with suppliers compared to many other retailers.
In contrast to numerous other retailers, Costco does not provide a yearly forecast. Additional insights regarding the quarterly performance are expected during an earnings call set for 5 p.m. ET.
During the March earnings call, CEO Ron Vachris indicated that members increasingly depend on Costco during tough economic times.
“During uncertain periods, our members have historically valued high-quality products at excellent prices even more, and our teams will continue to meet this challenge by utilizing our global buying power, robust supplier partnerships, and innovative strategies,” Vachris remarked earlier.
Approximately one-third of Costco’s U.S. sales comprise imported goods, with less than half of that total deriving from China, Mexico, and Canada, as Vachris noted in March.
However, tariffs might also raise costs for Costco, potentially leading to higher prices for customers. Earlier on Thursday, Best Buy’s CEO Corie Barry stated that the retailer had already increased prices on certain consumer electronics due to tariffs. Last week, cosmetics brand E.l.f. Beauty declared a price hike on its makeup products. Walmart’s CFO John David Rainey also cautioned earlier this month that elevated prices would be available at the discount retailer’s stores and website in late May or June.
As of Thursday’s market close, shares have risen around 10% year-to-date, outpacing the S&P 500’s gains of less than 1% during that time.
