Costco Wholesale reported third-quarter results after the U.S. market close on Thursday (Friday AEST), with rising fuel prices driving record demand at its petrol stations, helping the retailer outperform expectations for comparable sales growth.
The wholesale retailer reported earnings per share (EPS) of US$4.93, in line with market expectations, while revenue came in at $70.53 billion; an increase of 11.6% from $63.2 billion in the prior corresponding period (pcp), and also matching forecasts.
Comparable sales rose 9.8% during the quarter, exceeding market expectations for growth of 7.8%.
Excluding the impact of higher fuel prices, adjusted comparable sales increased 6.6%.
Digital comparable sales climbed 21.5%, supported by a 37% increase in traffic across Costco’s website and mobile app.
Membership fee revenue rose 11% to $1.37 billion, while the number of paid members increased 4.1% to 82.9 million.
The retailer said its strongest-performing categories included pharmacy, home furnishings, gold and jewellery.
Chief executive Ron Vachris said Costco experienced “record-breaking volumes” at its petrol stations during the quarter as consumers sought cheaper fuel amid rising oil prices linked to conflict in the Middle East.
Vachris said the final five weeks of the quarter represented Costco’s five highest fuel-volume weeks on record.
“Against the backdrop of ongoing macro uncertainty, our focus is providing quality goods and services at the lowest possible price,” Vachris said during a call with analysts.
The company also reported an increase in first-time memberships driven by consumers visiting Costco fuel stations.
“We believe this will drive even greater loyalty with these members in the future, as members who use our gas stations typically spend more with us in the warehouse,” he said.
Costco has also been involved in tariff-related developments following a Supreme Court decision invalidating some import levies introduced by Donald Trump.
The retailer had previously indicated it would lower prices if tariff refunds were received.
On Thursday, Vachris said Costco had started filing tariff refund claims and expected approved claims to be processed progressively over the coming months.
It intends to return the refunded amounts to customers “in some form”, although Vachris said details would depend on the final amounts received.
“Our goal is to be the first to lower prices and the last to raise them,” Vachris said.
Costco shares closed 0.5% higher during Thursday’s regular session before slipping 0.2% in after-hours trading following the earnings release.
The company’s market cap stands at $4.59 trillion.
