Costco gold buyer Blaine Silverman explains why he jumped on the frenzy and why investors should consider buying into the precious metal.
Costco Wholesale Inc. on Thursday reported better-than-expected third-quarter sales as cash-strapped consumers flocked to the company’s warehouses for low-priced groceries and discretionary items.
The membership retailer credited solid demand for grocery and bakery products to consumers struggling with the still-high cost of living, as they preferred to cook meals at home.
The company has seen steady demand for low-priced discretionary products as consumers have turned to lower-priced items across a range of product categories.
Costco bucks the trend: Foot traffic soars despite tough economy
Costco’s net sales increased 9.1% for the quarter, while e-commerce sales surged 20.7%. Membership revenue increased 7.6% and the renewal rate for Costco members worldwide was 90.5%. (iStock/iStock)
Earlier this month, retail beacon Walmart Inc. beat its quarterly forecast and projected a positive annual target, helped by stable demand for cheap food and hopes of a recovery in demand for non-essential items.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| Fee | Costco Wholesale Co., Ltd. | 815.34 | +8.82 | +1.09% |
But another big rival, Target, reported tough quarterly results due to sluggish consumer spending.
Costco’s total revenue for the quarter ended May 12 was $58.52 billion, beating analysts’ average estimate of $58.07 billion, according to LSEG data.
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Costco’s new chief financial officer, Gary Miller-Chip, said the company would keep its $1.50 hot dog sale in its stores’ food courts, despite speculation that the sale would be discontinued. (Stephanie Keith/Bloomberg via Getty Images/Getty Images)
The company also reported earnings of $3.78 per share, beating expectations of $3.70.
“Consumers have become increasingly value-conscious over the past two years, and that trend isn’t slowing down anytime soon, which means Costco should benefit for years to come,” said eMarketer analyst Blake Droosh.
According to data from Placer.ai, visits to Costco Wholesale increased 8.9% in the first quarter compared to the same period last year, while visits to Walmart and Target increased 3.9% and 3.5%, respectively.
Costco’s top sales categories in the most recent quarter were electronics, gold and silver bullion, gift cards and e-tickets. (Photo: Joe Raedl/Getty Images/Getty Images)
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The company’s adjusted same-store sales rose 6.5% for the quarter, up from a 3.5% increase in the same period a year ago.
Costco’s e-commerce comparison sales rose 20.7% in the quarter after declining 10% last year.
