Costco reported better-than-expected earnings and revenue for its fiscal third quarter on Thursday, boosted by an 8% increase in sales. The warehouse club continues to benefit from its value-driven business model, especially as tariff uncertainty looms.
Fiscal Q3 Results vs. Expectations (LSEG consensus):
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Earnings per share: $4.28 vs. $4.24 expected
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Revenue: $63.21 billion vs. $63.19 billion expected
Net income rose to $1.90 billion ($4.28 per share) for the quarter ending May 11, up from $1.68 billion ($3.78 per share) a year earlier. Revenue increased from $58.52 billion in the prior-year quarter.
Comparable sales—a key retail metric excluding the impact of new or closed stores—rose 8%, while e-commerce sales surged nearly 16%, excluding fuel and currency fluctuations.
With tariffs raising economic concerns and potentially driving up consumer prices, Costco may stand to gain. Its reputation for competitive pricing and bulk discounts could attract more budget-conscious shoppers, potentially boosting membership renewals. Additionally, its discounted gas and groceries tend to draw steady foot traffic even during economic slowdowns.
Costco’s scale and supplier relationships also give it stronger negotiating power compared to smaller retailers. However, tariffs could increase the company’s costs, potentially leading to higher prices for shoppers. Other retailers, including Best Buy, Walmart, and E.l.f. Beauty, have already reported price increases due to tariffs.
CEO Ron Vachris emphasized during the March earnings call that Costco becomes even more important to customers during tough economic periods.
“In uncertain times, our members have historically placed even greater importance on the value of high-quality items at great prices,” Vachris said, citing Costco’s global buying power and supplier relationships as key strengths.
Vachris said Costco maintained its “competitive price position” by working with suppliers to lower prices on key items like eggs, butter, and olive oil, which helped lift sales of other fresh items and food.
He noted that about one-third of Costco’s U.S. sales involve imported goods, with less than half of those imports coming from China, Mexico, and Canada.
Unlike many retailers, Costco does not provide annual guidance, but is expected to offer further details during its earnings call at 5 p.m. ET.
As of Thursday’s close, Costco shares are up roughly 10% year-to-date, outperforming the S&P 500’s less than 1% gain over the same period.
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