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Costco Wholesale (COST) posted mixed fiscal third quarter earnings results, falling short of revenue estimates while managing to outperform retail competitors like Walmart (WMT) and Target (TGT) as consumers navigate a tighter tariff environment.
Yahoo Finance senior retail reporter Brooke DiPalma comes on the show to talk about the biggest takeaways from Costco's latest earnings release.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Costco topping third-quarter earnings estimates, but falling slightly short on revenue. Still, sales increased 8% from a year earlier as consumers flock to value options. Yahoo Finance's Brooke DiPalma is here now with the biggest takeaways from the results from Costco here. Brooke, what do we know?
Costco has remained competitive in this environment, and that's the reason that CEO said that they did well this quarter with that competitive price position. If you take a closer look at what analysts have said on the street, is that Costco tends to execute well in this uncertain operating environment, and that's what we saw play out this quarter. They outperformed Walmart, they outperformed Target, not only in terms of same-store sales growth, but also in terms of traffic. And what they were able to do this past quarter is offer what customers want: sharp prices and value for their money. They said that they were able to lower cost of eggs, butter, and olive oil. We also saw certain items that consumers have been pulling back from, like gold and jewelry, toys, health, and beauty, be the ones that customers gravitated towards this past quarter. And lastly, they were able to manage tariffs. Well, Wall Street certainly pleased with that. One-third of its sales in the US are imported, two-thirds of those are non-foods, and they import just 8% of US sales from China. Also inventory expected to do well, expected to be in full stock this summer. They said they were able to pull ahead patio furniture and sporting goods. So hey, good news there.
Summer goods, Brooke. Thank you so much, and thanks for modeling with us earlier. As always.
Oh, really appreciate you, as always.
