Costco posts another quarter of sales growth amid an uncertain consumer environment

costco (It costs) estimates were slightly beat in fiscal first-quarter results as inflation-weary shoppers turned to wholesale retailers.

Adjusted earnings per share were $4.04, compared to Bloomberg’s consensus estimate of $3.81. Revenues of $62.15 billion also exceeded expectations of $61.98 billion.

“Our members are willing to spend with low inflation” as long as there is “newness of items, quality and value,” CFO Gary Millership said on his earnings call.

Same-store sales, excluding fuel, rose 7.2% in the quarter, boosted by its U.S. business, followed by international business and then Canada.

Traffic rose 5.1%, falling short of the 6.87% jump Wall Street had hoped for, but ticket volume grew 0.1%, exceeding the 0.40% decline the Street had expected.

Millership added that there is a “division” among consumers when it comes to food shopping, with some buying more expensive meats, while others buy lower-priced items such as poultry and some cuts of beef and pork.

Costco shares remained flat Thursday after the results. Year to date, its stock is up more than 50%, outpacing the S&P 500’s gain of 27% (^ GSBC).

Here’s what Costco reported for its fiscal first quarter, which ended Dec. 4, 2024, compared to Bloomberg estimates.

profit: $62.15 billion compared to $61.98 billion

Adjusted earnings per share: $4.04 vs $3.81

Total comparable company sales growth, excluding fuel: 7.2% vs. 6.26%

• US same-store sales growth: 7.2% vs. 6.14%

• Same-store sales growth in Canada: 6.7% vs. 5.68%

• Other international sales growth: 7.1% vs. 7.08%

Growth of e-commerce: 13.2% vs. 14.1%

Membership fee revenue: $1.17 billion versus $1.17 billion

Possible definitions Under President-elect Donald Trump, it is attracting the attention of the administration. Millership said it was “difficult for anyone to predict” because of “uncertainty about the timing and scope of the changes,” describing the tariffs as “not something we generally view as positive.”

“We believe our dealers and buyers are equipped… to deal with, deal with and manage this situation,” he said.

Some options include postponing inventory purchases, working with vendors to reduce costs, considering alternative sourcing locations, or reconsidering what items will be sold.

A quarter of Costco’s business is non-food items that will be affected, although only a “subset” of that category is imported.

On September 1, Costco raised the price of its Gold Star membership by $5 to $65 and the price of its Executive membership by $10 to $130. This was the first full quarter since prices rose.

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