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ISSAQUAH, Wash. – Costco Wholesale reported robust first-quarter earnings, surpassing Wall Street expectations for revenue and profit. The membership-only retail giant attributed its success to the popularity of its bulk and discounted offerings, which appealed to budget-conscious shoppers during the early holiday season. The company’s shares, already up 51% this year, rose an additional 1% in extended trading following the announcement.
Costco’s strategy of selling larger-pack items and offering attractive deals on essentials such as bread and eggs has made it a popular choice for shoppers navigating high inflation. Beyond food staples, the retailer saw increased demand in other categories, including home furnishings and jewelry.
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This year’s holiday shopping season is unusually short, with only 26 days between Thanksgiving and Christmas, prompting U.S. retailers to launch discounts and promotions as early as October. Costco adapted by running pre-Black Friday sales in early November, a move aimed at mitigating potential sales impact from the late Thanksgiving weekend, which fell outside its first fiscal quarter.
“What we’re seeing with our members is that now, probably more than any time in recent history, that combination of newness of items, quality, and value are really important to the member,” said Gary Millerchip, CFO, on an earnings call with analysts Thursday. “And you know, we’re seeing the member being very choiceful about how they’re spending the dollars.”
To attract shoppers, Costco introduced heavy discounts on high-demand items such as an LG UltraGear Gaming Monitor and JBL headphones. These competitive promotions helped Costco maintain steady growth despite intense competition.
According to LSEG data, Costco’s revenue climbed 7.5% to $62.15 billion for the quarter ending Nov. 24, outperforming analysts’ expectations of $62.08 billion. Net profit was equally impressive, reaching $4.04 per share, significantly ahead of the estimated $3.79.
Another contributor to Costco’s profitability was the recent increase in membership fees. The annual fee hike to $65 for Gold Star members and $130 for Executive members boosted membership revenue by 7.7%, reaching $1.17 billion for the quarter.
As the holiday season progresses, Costco’s ability to attract value-seeking customers with competitive pricing and diverse product offerings cements its position as a retail leader.
