Costco just reported strong earnings, surpassing Wall Street’s expectations with an 8.2% increase in sales compared to last year. In the first fiscal quarter, they earned $4.50 per share, surpassing predictions of $4.27. Revenue also climbed to $67.31 billion, exceeding the expected $67.14 billion.
The warehouse club has attracted new members as shoppers look for deals on groceries and essentials. Interestingly, its appeal is growing among younger customers. Costco benefited from a membership fee hike that took effect in September 2024, encouraging more people to sign up or renew.
In the three months ending November 23, Costco’s net income reached $2 billion, up from $1.8 billion the previous year. Comparable sales increased by 5.9% in the U.S. and a remarkable 6.4% globally. Additionally, digital sales soared by 20.5% year-over-year.
Costco relies heavily on membership fees to keep prices low. However, rising costs due to tariffs have posed challenges. A significant portion of Costco’s U.S. sales comes from imported goods. To counteract these rising costs, CFO Gary Millerchip mentioned the introduction of new private-label products and adjustments to their inventory to mitigate tariff impacts.
In a notable legal move, Costco filed a lawsuit against the Trump administration for a refund of tariffs and to halt further duties. As of now, Costco’s shares have dipped nearly 4% this year, while the S&P 500 gained 17%. However, over the past five years, Costco’s stock has surged by an impressive 141%, closing at $884.48, giving the company a market value of $392.67 billion.
This strong performance showcases Costco’s ability to adapt and thrive even amidst challenges, reflecting broader consumer trends towards seeking value. In a recent survey, 70% of shoppers indicated they are prioritizing savings on everyday purchases, further highlighting Costco’s timely strategy.
For more about Costco’s recent achievements and future outlook, you can find detailed analyses in reports from sources like MarketWatch and CNBC.
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