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(Bloomberg) -- Costco Wholesale Corp. posted better-than-expected earnings in the third quarter, a sign that the nation’s largest club chain is flexing its scale and devoted following to navigate tariffs and economic turbulence.
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The retailer said it generated earnings per share of $4.28 for the quarter ended May 11, above what Wall Street analysts were expecting. The metric suggests that Costco is maintaining profitability even as consumers prioritize necessities to save money.
The shares rose 1.5% at 9:37 a.m. in New York trading Friday. Through Thursday’s close, the stock had advanced 10% year to date, outpacing the S&P 500 Index.
Costco is the latest big-box retailer to post quarterly results, as investors and analysts search for clues on how shoppers are spending. Many consumer-facing companies have posted soft results in recent weeks with Target Corp., Procter & Gamble Co. and Kraft Heinz Co. slashing their annual outlooks. Walmart Inc. and a handful of names have been outliers with strong results.
Sweeping, on-again, off-again US tariffs have upended operations across industries, fueling chaos among companies, investors and consumers. Courts are weighing in on whether these tariffs can stay in effect.
“We are basing our decisions really based on what we know” and what’s in place at the moment, Chief Financial Officer Gary Millerchip said in an interview, adding that Costco hasn’t made changes in response to court orders this week as tariffs are still in effect. “It’s difficult to make decisions on items that we just don’t know what the outcome will be.”
At Costco, price increases are expected to hit later in the year as the company starts to sell new inventory. It won’t be a “one-size-fits-all” scenario, Millerchip said. The retailer is likely to hold prices of some items steady and raise others. Costco may stop selling certain products if they become too expensive, and timing will also vary for items.
In addition to working with suppliers, Costco is rerouting goods sourced from countries with high tariffs to other markets, Chief Executive Officer Ron Vachris said on a call with analysts Thursday. About a third of Costco’s US sales come from goods imported from other countries.