Costco reported quarterly profit that was better than expectations, a sign that spending remains healthy as shoppers prioritize essentials and seek value.
The retailer said it generated earnings per share of $5.87 for the quarter through the end of August, higher than what Wall Street analysts were expecting. Its comparable sales, excluding gas and currency fluctuations, also beat expectations.
Shares were little changed Thursday afternoon.
The nation’s largest warehouse club operator has posted strong sales growth in recent years, attracting consumers with its deals, ever-changing assortment and popular Kirkland brand. Costco tends to be more resilient to macroeconomic swings than other companies because its customers pay a membership fee to shop there and are more affluent and loyal than shoppers at competing retailers.
Many big-box retailers have recently reported better-than-expected results driven by consistent spending patterns. That’s set to face a test in the coming months, as more tariff-driven inflation starts to flow through. Rising concerns about the job market are also hurting consumer sentiment.
In response to higher costs, Costco previously said it would hold prices steady on some items or stop selling products if they became too expensive. The company has sourced more locally produced items, including mattresses and pillows. Separately, it’s beefing up store services, such as extending operating hours for higher-tier members, to spur more spending.
Rival Sam’s Club, which is part of Walmart, has also been generating healthy sales. CEO Chris Nicholas said this week on Bloomberg Television that consumers are spending in a consistent, rational way and are still opening up their wallets when they find good deals.
Although it has raised some prices because of tariffs, Sam’s Club is working closely with suppliers to keep prices low. For example, it’s still sourcing roses from Ecuador but wrapping them in the U.S. to cut costs, Nicholas said. Because club operators offer limited assortments, they can also be more agile in what they sell.