Costco tops estimates as discount gas, bulk deals draw inflation-weary shoppers

Sept 24 — Costco Wholesale beat quarterly estimates on ​Thursday, recording strong comparable sales growth as inflationary pressures drove consumers to its discount gas stations and boosted demand across its warehouses.

The warehouse ‌retailer reported fourth-quarter adjusted earnings per share of $6.60, excluding a one-time 15-cent benefit from tariff refunds, ⁠beating analysts' estimates of $6.53, according to ​LSEG data.

Quarterly revenue rose about 11% ⁠from a year earlier to $95.72 billion, topping Wall Street estimates of $94.86 billion. ‌Total same-store sales excluding ‌gas and foreign exchange effects rose 6.7%, above analysts' expectations of ⁠6.11%.

Costco has benefited as consumers look to ⁠stretch household budgets, with its low-price bulk model and discounted fuel offering helping attract shoppers amid persistent cost pressures.

"It was another well-rounded quarter for Costco, with comparable sales growth continuing to lead its big-box peers, driven by balanced traffic and average ticket growth," CFRA analyst Arun Sundaram ‌said.

Gasoline was a key sales driver, with CEO ​Ron Vachris saying the business had a "record year."

Costco gas stations, which usually sell below market value, according to TD Cowen analyst Oliver Chen, have helped pull in price-sensitive customers as the Iran war sends fuel prices soaring.

The company received tariff refunds of $184 million during the quarter under the International Emergency Economic Powers Act, Costco's CFO Gary Millerchip said in ​a post-earnings call.

The refunds were reinvested through price reductions on some items, including essentials, ‌meat, beverages and ‌some non-food ⁠items, CEO Ron Vachris added.

The retailer has also seen average basket sizes increase as shoppers consolidate their trips to the store, loading up on groceries and other essentials in one visit rather than doing multiple runs.

The company's shares were ‌flat in extended trading. ​As of Thursday's close, the stock has ‌risen nearly 4% so ⁠far this year.

(Reporting ​by Angela Christy in Bengaluru and Nicholas P. Brown in New York; Editing by ​Jonathan Ananda)

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