Costco's Quarterly Profit Beats Estimates, Boosted by Tariff Refunds
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Costco Wholesale Corp. reported quarterly profit that exceeded Wall Street expectations, helped by tariff refunds. For the quarter ended August 30, adjusted earnings per share were $6.75, above the Bloomberg analyst consensus estimate. Tariff refunds contributed 15 cents per share. Executives said on a conference call that the company's gas and travel businesses performed well, with one customer booking a 154-night cruise costing over $218,000. Home goods, small electronics, and beauty products led sales growth. Adjusted same-store sales rose 6.7%, beating expectations. The company received $184 million in tariff refunds in the prior quarter and a similar amount in the current period, using the funds to lower prices on meat, produce, beverages, and home goods. CFO Gary Millerchip said food inflation has remained steady recently, while non-food prices rose due to higher memory chip costs and oil prices from the Middle East conflict. Younger consumers continue to join Costco, with membership among those under 40 up nearly 60% since the pandemic, now representing over 25% of shoppers. CEO Ron Vachris noted that these members initially spend less but gradually increase spending.
Source report
Costco Wholesale Corp. reported quarterly earnings that surpassed Wall Street forecasts, helped by revenue related to tariff refunds.
For the quarter ending August 30, the retailer posted adjusted earnings per share (EPS) of $6.75, exceeding the average analyst estimate compiled by Bloomberg. Tariff refunds contributed $0.15 to the quarterly EPS.
Key Business Highlights
- Gas and travel segments performed strongly, according to executives during a Thursday analyst call. One customer booked a 154-night cruise worth over $218,000.
- Sales growth leaders included home goods, small electronics, and beauty products.
- Adjusted same-store sales rose 6.7% in the quarter, beating expectations.
Tariff Refunds and Pricing Strategy
Executives noted that the company received $184 million in tariff refunds during the previous quarter and a similar amount in the current period. Costco used these funds primarily to lower prices on items such as meat, produce, beverages, and home goods.
Inflation and Cost Trends
Chief Financial Officer Gary Millerchip said food inflation has remained at similar levels in recent months. However, some non-food items have seen price increases due to rising memory chip costs and higher oil prices linked to the Middle East conflict.
Growing Younger Membership Base
Costco reported continued growth in younger members. Since the COVID-19 pandemic, membership among those under 40 has increased by nearly 60%. This demographic now accounts for more than 25% of Costco shoppers.
CEO Ron Vachris noted that while these younger members initially spend less, their spending tends to increase over time.
Source
domesticNeutral / independent
Part of this Story
Costco beats Q4 estimates on tariff refunds, same-store sales rise 6.7%