Costco Wholesale reported third-quarter revenue of $61,96 billion, up 8% but falling short of analysts' expectations of $63,19 billion. Earnings per share, excluding special items, came in at $4,28, slightly above estimates of $4,24. Comparable sales excluding fuel rose 8%, beating the 6,96% consensus.
The main driver of the performance were Costco's private label products, which offer more affordable prices than traditional brands and are increasingly appreciated by consumers. In a context marked by inflation and economic uncertainty, customers tend to stock up on essential goods, rewarding the warehouse club formula.
To reduce the impact of U.S. tariffs, Costco has brought forward its summer imports and redirected some of its merchandise to non-U.S. markets. The strategy comes amid the challenges many retailers are facing as they face the costs of decoupling from China.
The company said the price increase would be a last resort, unlike Walmart, which has already announced upcoming price increases. Target, on the other hand, chose not to raise prices but lowered its annual forecast.
Meanwhile, U.S. consumer confidence has fallen to a three-year low. However, according to analyst Zak Stambor (eMarketer), current dynamics are strengthening the position of formats like Costco.
