Costco Revenue Beats Estimates as Inflation Drives Bulk Shopping

Costco Wholesale reported stronger-than-expected fourth-quarter revenue on Thursday, supported by steady demand for groceries and other essential goods as inflation continues to pressure household budgets.

The warehouse retailer generated quarterly revenue of $95.72 billion, surpassing Wall Street expectations of $94.86 billion, according to LSEG data. Costco also posted adjusted earnings of $6.60 per share, beating analysts’ average estimate of $6.53 per share.

Costco said quarterly earnings received an additional boost of 15 cents per diluted share from tariff refunds under the International Emergency Economic Powers Act.

Persistent inflation has helped drive more price-conscious consumers toward Costco’s membership-based warehouse model. The company keeps prices competitive by offering products in larger quantities, making it attractive to shoppers seeking to lower their per-unit costs on food, household supplies and other everyday necessities.

Higher living costs have also encouraged consumers to consolidate shopping trips. Rather than making several smaller visits to stores, customers are increasingly purchasing groceries and essentials in bulk during a single Costco trip. That trend has supported both warehouse traffic and average basket sizes.

Costco’s fuel business has provided another draw for budget-conscious shoppers. Its gas stations typically offer fuel at prices below broader market levels, according to TD Cowen analyst Oliver Chen. That discount has become increasingly important as the Iran war pushes fuel prices higher and adds further pressure to consumer expenses.

The quarterly results highlight Costco’s ability to benefit from changing shopping habits during periods of elevated inflation. While consumers remain cautious about discretionary spending, demand for essential products has remained resilient, helping the retailer attract shoppers looking for value.

Costco’s combination of bulk purchasing, competitive prices and lower-cost fuel has strengthened its appeal as households seek ways to manage higher everyday expenses, contributing to better-than-expected revenue and earnings in the fourth quarter.