Full Breakdown
Costco Beats Quarterly Sales Estimates as Inflation Drives Shoppers to Discount Gas and Bulk Goods
By Drooid · · How we work
Core Event
On September 24, Costco Wholesale (COST.O) released its fourth-quarter results, showing adjusted earnings per share of $6.60, surpassing analysts’ consensus of $6.53 (LSEG data). Quarterly revenue rose about 11% year over year to $95.72 billion, beating Wall Street’s estimate of $94.86 billion. Same-store sales, excluding gas and foreign-exchange effects, increased 6.7%, outpacing the expected 6.11%.
Data & Statistics
- Adjusted EPS: $6.60 vs. $6.53 expected.
- Revenue: $95.72 billion, an 11% YoY increase, versus $94.86 billion forecast.
- Same-store sales growth (ex-gas): 6.7% vs. 6.11% forecast.
- Tariff refunds received: $184 million under the International Emergency Economic Powers Act, reinvested as price cuts on essentials, meat, beverages, and select non-food items.
- Stock performance: shares were flat in extended trading; the stock has risen nearly 4% year-to-date.
Official Statements & Responses
Chief Executive Officer Ron Vachris described the quarter as “well-rounded,” noting that gasoline sales delivered a “record year” and helped attract price-sensitive shoppers, especially as the Iran-related conflict lifted fuel prices. CFO Gary Millerchip explained that the $184 million in tariff refunds were used to lower prices on a range of items, reinforcing Costco’s low-price bulk model.
Analysts highlighted the role of discounted fuel in driving traffic. CFRA analyst Arun Sundaram said comparable-sales growth continued to lead Costco’s big-box peers, driven by balanced traffic and higher average ticket sizes. TD Cowen analyst Oliver Chen added that Costco’s gas stations, which typically sell below market rates, have drawn cost-conscious consumers amid rising fuel costs.
Why It Matters
The results illustrate how inflationary pressure can shift consumer behavior toward discount retailers that combine low-price bulk goods with below-market gasoline. Costco’s ability to translate higher traffic at fuel stations into broader basket growth underscores the strategic value of its integrated retail-fuel model during periods of elevated energy prices. The company’s reinvestment of tariff refunds into price reductions further reinforces its positioning as a budget-focused alternative for households seeking to stretch budgets.