Costco Wholesale (COST) has reported mixed financial results for this year’s first quarter as consumers reign in their spending on discretionary items.
The Seattle-based company reported earnings per share (EPS) of $3.78 U.S., which topped analyst estimates of $3.70 U.S.
However, the wholesale club’s revenue of $57.40 billion U.S. narrowly missed Wall Street forecasts of $58 billion U.S. Sales were up 9% from a year earlier.
Costco said its same-store sales rose 6% year over year during the quarter, in line with expectations.
Management blamed the revenue miss on a pullback in consumer spending on non-essential items amid high inflation and interest rates.
Once again, Costco declined to increase its annual membership fees, which it hasn’t raised since 2017. Membership fees generate about 70% of the company’s operating profit.
Visits to Costco outlets rose 8.9% year-over-year in this year’s first quarter, outperforming foot traffic at competitors such as Walmart (WMT) and Target (TGT).
Additionally, Costco continued to see strength at its e-commerce unit. Digital same-store sales in Q1 rose 20.7% year-over-year.
Company executives said they are working to improve delivery times of e-commerce shipments and adding a store pick-up option.
Costco’s stock is down 2% on news of the latest financial results. Over the last 12 months, the company’s share price has risen 59% to trade at $815.34 U.S. per share.
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