Costco's Crushing It Sales Soar, Analysts Eat Their Hats!

Costco Smashes Expectations: Earnings and Revenue Soar as Sales Jump 8%

Retail giant Costco continues to demonstrate its resilience and appeal, posting impressive fiscal third-quarter results that have exceeded Wall Street's forecasts. The warehouse club retailer's latest performance underscores its ability to thrive even amidst economic uncertainties, driven by its loyal membership base and value-driven proposition.

Here's a breakdown of the key highlights from Costco's earnings report:

• Earnings per share (EPS): $4.28 vs. $4.24 expected
• Revenue: $63.21 billion vs. $63.19 billion expected

A Closer Look at the Numbers

Costco's net income for the three-month period ending May 11th reached a robust $1.90 billion, translating to $4.28 per share. This marks a significant increase compared to the $1.68 billion, or $3.78 per share, reported in the same period last year. Revenue also saw a substantial rise, climbing from $58.52 billion in the year-ago quarter.

One of the most closely watched metrics in the retail industry, comparable sales, also delivered strong results. Comparable sales rose by an impressive 8%, excluding gas and the impact of foreign exchange fluctuations. Furthermore, Costco's e-commerce operations experienced substantial growth, with sales increasing by nearly 16% compared to the previous year.

Costco's Strategic Advantage in a Tariff-Ridden Landscape

As economic worries mount and tariffs threaten to drive up consumer prices, Costco appears well-positioned to benefit. The company's reputation for competitive pricing and bulk discounts could attract even more customers seeking value. Moreover, the warehouse club model, which includes discounted gas and groceries, ensures a steady flow of traffic, even when consumers become more cautious with their spending.

Costco's considerable size gives it a significant advantage in price negotiations with suppliers, allowing it to mitigate the impact of tariffs and maintain competitive prices for its members. In a challenging economic climate, this bargaining power becomes even more critical.

CEO's Perspective: Value and Resilience

On the company's previous earnings call, CEO Ron Vachris emphasized the growing reliance on Costco during uncertain times. "In uncertain times, our members have historically placed even greater importance on the value of high-quality items at great prices, and our teams will continue to rise to this challenge by leveraging our global buying power, strong supplier relationships, and innovation," Vachris stated.

While about a third of Costco's U.S. sales come from imported goods, less than half of these imports originate from China, Mexico, and Canada, providing some insulation from potential tariff-related disruptions.

Potential Headwinds: Tariffs and Price Increases

Despite its strengths, Costco isn't entirely immune to the impact of tariffs. Increased tariffs could potentially translate into higher prices for shoppers. Other retailers, such as Best Buy and Walmart, have already indicated that they are raising prices on certain goods due to tariffs.

Market Performance and Future Outlook

As of Thursday's close, Costco's shares have risen approximately 10% year-to-date, outperforming the S&P 500's gains during the same period. While Costco typically refrains from providing an annual outlook, investors and analysts will be closely watching the earnings call for further insights into the company's performance and future strategies. The earnings call is scheduled for 5 p.m. ET.

Costco's impressive third-quarter results reflect its unique value proposition and operational excellence. The company's ability to navigate economic uncertainties and maintain strong growth momentum underscores its position as a leader in the retail landscape. As consumers increasingly seek value and savings, Costco is well-positioned to continue its upward trajectory.

Tags: Costco, Earnings, Revenue, Sales, Retail, Stock, Business, Finance, E-commerce, Warehouse club

Source: https://www.cnbc.com/2025/05/29/costco-cost-q3-2025-earnings.html