Costco Wholesale missed Wall Street expectations for third-quarter revenue due to reduced consumer spending on non-essential items like home furnishings.
Rising living costs and hefty tariffs have led consumers to cut back on large purchases, impacting Costco’s revenue.
The big picture: Consumer sentiment hit a nearly three-year low in May, with inflation expectations surging to levels last seen in late 1981.
- Fears of a potential recession and price increases have prompted a shift in consumer spending patterns towards essentials.
- Costco’s results reflect the uncertain retail landscape, with Walmart planning price hikes to address tariffs while maintaining its full-year forecast.
- Target, on the other hand, revised its annual outlook downward without opting to raise prices, considering it a last resort measure.
Zoom in: Costco’s private label products and increased consumer stockpiling of essential goods have driven better-than-expected comparable sales growth in the quarter.
- Same-store sales, excluding gas, saw an 8% rise, surpassing the estimated increase of 6.96% for the quarter.
- Despite missing revenue expectations, Costco reported an 8% increase in quarterly revenue to $61.96 billion.
- The company earned $4.28 per share, slightly exceeding analysts’ estimates of $4.24 per share.
