Anuja Bharat Mistry
(Reuters) – Costco Wholesale (NASDAQ:) beat third-quarter revenue expectations on Thursday as cash-strapped consumers flocked to its warehouses to stock up on inexpensive discretionary goods and groceries.
The membership-only retailer has seen a strong boost for its fresh produce and bakery products, including recently added lemon and blueberry bread, morning scones, and chocolate chop cookies, as consumers face a still-high cost of living. preferred to cook more food at home.
“As inflation has stabilized, members are returning to purchasing more discretionary items, with growth coming from toys, furniture, lawn and garden, and health and beauty products,” CFO Gary Millerchip said on the earnings call. profit and loss statement.
Earlier this month, retail leader Walmart (NYSE:) beat quarterly forecasts and forecast positive full-year targets, helped by strong demand for lower-priced products and expectations of a rebound in demand for essential goods.
However, another, larger company, Target, reported a weak quarter due to weak consumer spending.
Costco’s total revenue for the quarter ended May 12 was $58.52 billion, compared with analysts’ average estimate of $58.07 billion, according to LSEG data.
The company also reported earnings of $3.78 per share, beating estimates of $3.70.
“In a world where most retailers suffer from some form of volatility or softness, Costco is a rare beacon of consistency,” said Scot Ciccarelli, an analyst at Truist Securities.
In the first quarter, visits to Costco Wholesale were up 8.9% year-over-year, while visits to Walmart and Target were up 3.9% and 3.5%, respectively, according to Placer.ai.
Costco’s total comparable sales for the quarter rose 6.5% on an adjusted basis, compared with growth of 3.5% last year.
The company’s comparable e-commerce sales grew 20.7%, driven primarily by gold and silver bullion, gift cards and home appliances.
The company’s shares fell 1.7% in after-market trading amid a general market decline.