Even as it tried to mitigate price increases for members necessitated by inflationary pressures, Costco continued to produce earnings and comparable store gains in the third quarter.
Costco narrowly topped a MarketBeat-published analyst consensus diluted earnings per share estimate of $3.03 as revenue easily exceeded a revenue estimate of $51.49 million.
In the quarter year over year, comparable store sales increased 10.8%, adjusted to exclude the impact of fuel and foreign exchange volatility, with the United States up 10.7%, Canada up 12.8% and Other International up 9.1%, Costco reported. E-commerce gained 7.9% in the period year over year.
Average transaction was up 7.6% worldwide and 10.4% in the U.S. versus the year-past quarter, Bob Nelson, senior vp, finance and investor relations said in a conference call, who also noted that traffic increased by 6.8% worldwide and 5.6% in the U.S. in the period year over year.
Net sales for the quarter advanced to $51.61 billion from $44.38 billion while revenues including memberships increased to $52.6 billion from $45.28 billion in the year-earlier period, the company indicated. Operating income was $1.79 billion versus $1.66 billion in the quarter a year prior.
In the period, the departments making the strongest sales contributions were candy, sundries, tires, toys, jewelry, kiosks, home furnishings, apparel, bakery, and deli, Nelson said. The strongest e-commerce categories were special order, patio and garden, jewelry and home furnishings.
Nelson noted that Costco is experiencing something of a shift in spending. In 2021, the focus was more on items for the home while, this year, sales in tickets, restaurants, travel, tires and gas have gained. Still, he said, Costco is holding its own in categories such as apparel and furniture and jewelry, televisions and appliances.
At the same time, Nelson said, the company was intent on bolstering its value proposition by minimizing price increases to members despite its own rising costs.