Costco sales rise as inflation continues to weigh on consumers

Costco sales rise as inflation continues to weigh on consumers

COST COST -1.20%

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

The Issaquah, Washington-based company’s revenue rose 15% to $72.09 billion in the fourth quarter. The average estimate of analysts polled by FactSet was $72.04 billion.

Comparable sales, representing those of stores and digital channels operating for at least 12 months, grew by nearly 14% in the quarter compared to the same period last year. E-commerce sales grew 7.1% in the same period.

Costco, which specializes in selling products in bulk at a discount to paying members, has benefited largely during the Covid-19 pandemic as consumers bought in bulk to limit their outdoor travel, and demand was boosted by government stimulus. .

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

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Costco reported net income of $1.87 billion, or $4.20 per share, for the quarter ended Aug. , a year earlier. Analysts polled by FactSet had expected $4.19 a share.

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

The decision contrasts with Walmart Inc.

change in August to raise membership prices on its Sam’s Club network to $50 from $45 for its basic offer and to $110 from $100 for its premium offer. The price increase is the network’s first in nine years for the basic subscription and the first for the premium offering since its debut in 1999.

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

Costco shares fell 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, Sarah Nassauer of the WSJ dissects the wholesaler’s unique approach to doing business. Photo: Qian Weizhong/Zuma Press

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