Costco sales rise as inflation continues to weigh on consumers

Costco

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Wholesale Corp. reported higher sales last quarter, the latest indication that the warehouse retailer remains a haven for consumers dealing with constant inflation.

The Issaquah, Washington-based company’s revenue rose 15% to $72.09 billion in the fourth quarter. The average estimate of analysts polled by FactSet was $72.04 billion.

Comparable sales, representing those from stores and digital channels open for at least 12 months, were up nearly 14% in the quarter compared to the same period last year. E-commerce sales grew 7.1% over the same period.

Costco, which specializes in selling bulk merchandise at a discount to paying membersbenefited greatly during the Covid-19 pandemic as consumers bought in bulk to limit their outdoor travel and demand was supported by government incentives.

The company remains a popular destination as inflation erodes consumer spending power. The consumer price index, which measures what consumers pay for goods and services, rose 8.3 percent in August from a year earlier. The food index rose 11.4 percent over the past year, the largest 12-month increase since May 1979, according to the U.S. Bureau of Labor Statistics said earlier this month.

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Costco reported net income of $1.87 billion, or $4.20 per share, for the quarter ended Aug. 28, up from net income of $1.67 billion, or $3.76 per share, a year earlier. Analysts polled by FactSet had expected $4.19 per share.

Chief Financial Officer Richard Galanti said the company has no specific plans to increase membership fees at this time, but noted that it will happen at some point. “We still have that arrow in our quiver as we go forward,” Mr. Galanti said.

The solution contrasts with

Walmart Inc

moved in August to raise membership prices at its Sam’s Club chain to $50 from $45 for its core offering and to $110 from $100 for its premium offering. The price increase is the chain’s first in nine years for the prime membership and the first for the premium offering since it debuted in 1999.

“We’re mindful of the financial pressures on wallets right now,” Sam’s Club CEO Catherine McLay said at the time.

Costco shares were down 2.6% in after-hours trading. Shares closed Thursday at $487.17, down 1.2%.

Costco is one of the largest and most successful retailers in the country. In this video, WSJ’s Sarah Nassauer dissects the wholesaler’s unique approach to doing business. Photo: Qian Weizhong/Zuma Press

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