Dec 11 (Reuters) – Costco Wholesale beat Wall Street estimates for first-quarter revenue and profit on Thursday, as consumers snapped up affordable essentials and nice-to-have items at its stores ahead of the crucial holiday season.
Retailers as well as dollar chain operators have been able to draw customers across income groups to their stores with the help of attractive offers and seasonal deals, even at a time when surging inflation and a weak labor market has turned shoppers cautious.
Costco’s focus on providing value and leaning on items from its flagship private label, Kirkland Signature, has resonated with its members, who usually remain picky while spending on discretionary items.
Same-store sales, excluding gas, rose 6.4% for the quarter ended November 23, compared with analysts’ average estimate of a 5.82% increase as per data compiled by LSEG.
Walmart, Dollar Tree and Dollar General, after posting upbeat results for their recently reported quarters, highlighted that, along with lower-income consumers, slightly affluent shoppers are also trading in to their stores.
According to Placer.ai data, Costco saw 6% year-over-year rise in overall traffic during the three months from July to September, while visits in October were up 9.8% from a year earlier.
Costco posted quarterly revenue of $67.31 billion, compared with analysts’ estimate of $67.14 billion.
It earned a quarterly profit of $4.50 per share topping estimates of $4.27 per share.
Shares of the company were marginally down at $881.53 after the bell. The stock has fallen about 3% so far this year.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Krishna Chandra Eluri)
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