Costco sales rise as inflation continues to weigh on consumers

Costco sales rise as inflation continues to weigh on consumers

Costco COST -1.20%

Wholesale Corp. posted higher sales in the most recent quarter, the latest sign that the warehouse retailer remains a haven for consumers facing persistent inflation.

Revenue for the Issaquah, Wash.-based company rose 15% to $72.09 billion in the fourth quarter. The average estimate of analysts surveyed by FactSet was $72.04 billion.

Like-for-like sales, which represent those from stores and digital channels operating for at least 12 months, increased nearly 14% in the quarter compared to the same period last year. E-commerce sales increased 7.1% during the same period.

Costco, which specializes in selling discounted bulk items to paying members, benefited greatly during the Covid-19 pandemic as consumers bought in bulk to limit their outdoor travel, and demand was boosted by government stimulus.

The company has remained a popular destination as inflation has reduced the purchasing power of consumers. The consumer price index, which measures what consumers pay for goods and services, rose 8.3% in August from the same period a year earlier. The food index rose 11.4% over the past year, the biggest 12-month increase since May 1979, the US Bureau of Labor Statistics said earlier this month.


How have your Costco shopping habits changed over the past year? Join the conversation below.

Costco posted net income of $1.87 billion, or $4.20 per share, for the quarter ended August 28, compared to net income of $1.67 billion, or $3.76 per share, a year earlier. Analysts polled by FactSet had expected $4.19 per share.

Chief Financial Officer Richard Galanti said the company has no specific plans for a membership fee increase at this time, but noted that it will happen at some point. “We still have that arrow in our quiver as we move forward,” Galanti said.

The decision contrasts with Walmart inc.

in August to increase membership prices at its Sam’s Club chain from $45 to $50 for its basic offer and from $100 to $110 for its premium offer. The price increase is the chain’s first in nine years for the basic membership and the first for the premium offering since it made its debut in 1999.

“We are aware of the financial pressure on wallets right now,” Sam’s Club CEO Kathryn McLay said at the time.

Costco shares were down 2.6% in after-hours trading. The stock closed Thursday at $487.17, down 1.2%.

Costco is one of the largest and most successful retailers in the country. In this video, WSJ’s Sarah Nassauer discusses the wholesaler’s unique approach to doing business. Photo: Qian Weizhong/Zuma Press

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