Costco just dropped their quarterly numbers, and it’s a mixed bag. The wholesale giant is still performing well, but inflation and tariffs have shoppers being extra careful with their spending. Let’s break it all down.
Costco’s Numbers: What’s the Deal?
- Revenue: $63.72 billion (beating analyst estimates of $63.11 billion)
- Same-store sales: Up 6.8% (above the 6.4% forecast)
- E-commerce sales: Up 20.9%
- Earnings per share (GAAP): $4.02 (analysts expected $4.11)
- February sales: $19.81 billion (up 8.8% year-over-year)
Why Did Costco Stock Drop?
Even with solid numbers, Costco stock dipped 1.2% after hours. But overall, it has climbed 30%+ in the past year, so long-term investors are still seeing gains.
Costco $COST stock is back under $1,000 pic.twitter.com/DBgmEdvFy7
— Sigrid Camila (@SigridCamila8) March 7, 2025Challenges for Costco
1. Shoppers Are More Selective
CFO Gary Millerchip mentioned that people still want to spend, but they are being more careful about where their money goes. Inflation and potential new tariffs could make shoppers even more cautious.
2. Tariffs Could Shake Things Up
CEO Ron Vachris stated that about one-third of Costco’s U.S. sales come from imported products. With items sourced from China, Mexico, and Canada, new tariffs could increase costs, but Costco plans to adjust its sourcing strategies to minimize the impact.
3. Economic Conditions
Retail sales dipped in January due to cold weather and post-holiday spending slowdowns. Consumer confidence is also slipping, making budget-friendly retailers like Costco and Walmart more appealing, even to higher-income shoppers.
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What’s Selling Well at Costco?
- Electronics are in demand (TVs, gaming computers, pinball machines)
- Premium meats are performing well, but budget cuts like ground beef and chicken are selling even faster
- Pharmacy sales are strong, with more customers trusting Costco over local drugstores
New Store Openings & Business Expansion
Costco plans 28 new store openings by August, including three relocations.
Extended gas station hours have been successful, but there are no plans to extend store hours at this time.
Costco’s Long-Term Outlook
CEO Ron Vachris said, “When it rains, it rains on everyone.” Inflation and tariffs are affecting all retailers, not just Costco. But here’s why Costco remains strong:
- Consistent sales despite higher costs
- Flexible sourcing strategies
- High customer loyalty
Final Thoughts
Costco faces some economic headwinds, but its value-driven approach continues to attract shoppers. The stock may have dipped slightly, but long-term prospects remain strong.
Do you think Costco can maintain its momentum? Share your thoughts in the comments!
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