Costco tops quarterly sales estimates on resilient demand for essentials

Costco Wholesale beat quarterly revenue estimates on Thursday, as resilient demand for essential goods from shoppers feeling squeezed by high inflation drove foot traffic to its warehouses.

The company posted revenue of US$95.72-billion for the fourth quarter, above Wall Street estimates of US$94.86-billion, according to data compiled by LSEG.

Earnings for the quarter were lifted by a benefit of 15 cents per diluted share arising from tariff refunds under the International Emergency Economic Powers Act, Costco said.

The warehouse retailer, which keeps prices low by selling in bulk, has seen foot traffic rise as consumers trade down on essentials amid inflationary pressures.

That has helped fuel growth in average basket size as shoppers consolidate their trips to the store, loading up on groceries and other essentials in bulk in a single visit rather than multiple runs for fewer items.

Costco gas stations – which usually sell below market value, according to TD Cowen analyst Oliver Chen – have also pulled in price-sensitive customers as the Iran war sends fuel prices soaring.

The company posted adjusted earnings of US$6.6 per share for the quarter, above analysts’ estimates of US$6.53 per share, according to data compiled by LSEG.