Costco tops Wall Street’s sales and revenue expectations
Costco Wholesale topped Wall Street's expectations for its fiscal first quarter, posting robust sales growth of 8.2% year-over-year, fueled by a surge in digital sales, new store openings, and steady membership gains.
The warehouse giant reported earnings per share of $4.50, surpassing estimates of $4.27, while revenue reached $67.31 billion, slightly above the projected $67.14 billion. Net income rose to $2.0 billion, up from $1.80 billion a year earlier.
Digital Momentum and Holiday Strength
E-commerce was a standout, with digital sales jumping 20.5%. Traffic on Costco’s website increased 24%, while app traffic soared 48%. Same-day delivery partnerships with Instacart, Uber, and DoorDash grew even faster than overall online sales. The retailer also reported a record-breaking Black Friday for its U.S. e-commerce business, generating over $250 million in non-food orders.
Membership and Expansion
Costco continues to attract younger shoppers and benefit from a membership fee hike implemented in September 2024. Total paid memberships grew 5.2% to 81.4 million, while cardholders reached 145.9 million. The renewal rate in the U.S. and Canada remained high at 92.2%.
The company opened eight new locations during the quarter, including its third in France, bringing its global footprint to 921 clubs. CEO Ron Vachris reaffirmed plans to open 30 or more new warehouses annually in the coming years.
Navigating Tariffs and Inflation
With about a third of U.S. sales coming from imported goods, Costco is actively mitigating tariff impacts by sourcing more domestically, consolidating global buying, and leveraging its Kirkland Signature private label for greater supply chain control. The company has also sued the Trump administration to recoup tariffs paid this year pending a Supreme Court ruling.
Inflation remained manageable, with higher costs in beef, seafood, and coffee offset by deflation in eggs, cheese, and produce. Non-food categories saw low single-digit inflation, driven primarily by gold and imported goods.
Despite a nearly 4% stock decline year-to-date, Costco shares have surged 141% over the past five years, reflecting sustained investor confidence in its resilient business model.
