Updated version 2 - Costco's performance exceeded expectations, as discount gasoline and bulk commodity offers attracted consumers troubled by inflation.

Details and background information have been added throughout the article

Angela Christy M/Nicholas P. Brown

Reuters, September 24 - Costco Wholesale (COST.O) on Thursday reported quarterly results that exceeded expectations, with robust comparable sales growth driven by inflationary pressures steering consumers to its discount gas stations and lifting overall demand at its warehouse club locations.

According to LSEG data, the warehouse retailer reported adjusted fourth-quarter earnings per share of $6.60 (excluding a one-time benefit of $0.15 from tariff refunds), beating analysts’ estimates of $6.53.

Quarterly revenue increased approximately 11% year-over-year to $95.72 billion, above Wall Street’s forecast of $94.86 billion. Total same-store sales excluding fuel and currency impacts rose 6.7%, exceeding analysts’ expectations of 6.11%.

Costco has benefited as consumers seek to cut household expenses. Amid ongoing cost pressures, its low-price bulk goods model and discounted fuel services helped attract more shoppers.

CFRA analyst Arun Sundaram said, “This was another all-around strong quarter for Costco, with balanced growth in traffic and average ticket size helping it lead major retail peers in same-store sales growth.”

The gasoline business was a key sales growth driver; Chief Executive Ron Vachris said the segment had a “record year.”

According to TD Cowen analyst Oliver Chen, Costco’s gas stations typically sell fuel below market prices, and as fuel prices surged with the Iran crisis, this strategy helped draw in price-sensitive customers.

Costco Chief Financial Officer Gary Millerchip said during the earnings call that the company received $184 million in tariff refunds this quarter under the International Emergency Economic Powers Act.

Chief Executive Ron Vachris added that these refunds were reinvested through price reductions on certain goods, including essentials, meat, beverages, and some non-food items.

As consumers make store visits less frequently and opt for one-time purchases of larger volumes of groceries and essentials rather than multiple trips, the retailer’s average basket size has also increased.

In after-hours trading, the company’s share price was flat. As of Thursday’s close, the stock was up nearly 4% year-to-date.

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