Costco Profit Beats Estimates on Healthy Consumer Spending

Costco reported more members during the quarter, and about 90% of existing members renewed their service. (Ted S. Warren/AP)

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Costco Wholesale Corp. posted quarterly profit that beat expectations, showing the big-box retailer remains unfazed by tighter consumer spending.

The results reinforce Costco’s unique position among retailers as its affluent customer base, which is willing to pay an annual membership, helps to insulate the company. An ever-changing offering of jumbo-sized products, which are seen as a good value, is drawing consumers, while the Kirkland brand, used on everything from batteries to tequila, is also popular.

Costco ranks No. 47 on the Transport Topics Top 100 list of the largest private carriers in North America.

Costco reported more members during the quarter, and about 90% of existing members renewed their service. On a same-store basis, shopper traffic rose, but the number of transactions was flat.

Costco-Q1-2025-Operating-Results-2024

Earnings were $4.04 per share in the quarter ended Nov. 24, above the average analyst estimate compiled by Bloomberg. The company said the results included a tax benefit of $100 million that was “related to stock-based compensation.”

Costco has reported increases in sales and traffic in recent months. Food is selling well, as are discretionary items like jewelry and home furnishings. Comparable sales, excluding gasoline and currency impacts, rose 7.1% in the quarter. Online sales also grew.

Costco is among the last retailers to report earnings in 2024. Consumers remain choosy and are waiting to find the best possible deals following years of higher rates of inflation. But they’re still opening up their wallets for items that are new and affordable.

“People are very, very basic buying this year,” CEO Ron Vachris said on a call with analysts. So far, seasonal products are selling well and furniture has been among the drivers of e-commerce sales this holiday season. Executives added that consumers have been shifting spending into food and groceries and away from restaurants. There’s also a preference for premium and lower-priced items.

“Spending on discretionary items is improving, though consumers remain focused on value,” wrote Bloomberg Intelligence analysts Jennifer Bartashus and Jibril Lawal.

Costco, which operates more than 800 stores, raised membership fees earlier this year. It’s also been installing scanners for membership cards in more locations partly to discourage shoppers from sharing them.