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Costco (COST-2.23%) shoppers are on a bulk-buying spree, snapping up groceries, home furnishings and electronics, as the retailer defies growing concerns over rising tariffs and living costs.
The retail giant reported mixed second-quarter earnings on Thursday, March 6. Costco posted quarterly revenue of $62.53 billion, a 9% increase, though it fell short of analysts’ expectations, which had forecasted $63.11 billion, according to FactSet (FDS-0.85%). Same-stores sales increased by 6.8%, exceeding the anticipated 6.4%, while e-commerce sales surged by 20.9%. The stock slipped 2% in later afternoon trading.
Despite the looming threat of President Donald Trump’s U.S. tariffs, Costco’s performance underscores its strong and unique position with American consumers, particularly wealthier shoppers. Competitors like Walmart, Target, and Best Buy have warned that prices on everyday items, including fruits, vegetables, and electronics, are likely to rise.
Although Trump’s proposed tariffs have been paused – at least for now – the hikes would impose a 25% duty on imports from Mexico and Canada and 10% on Chinese goods.
In Dec. 2024, Costco CEO Gary Millerchip told investors the retailer was prepared to adapt should tariffs be imposed. “When it rains, it pours,” he said at the time, acknowledging the potential impact.
Unlike its rivals, Costco remains committed to offering bulk products at low prices. Last month, Hamilton “Tony” James, chairman of Costco, said the retailer was winning over wealthier shoppers, in part due to a selection of luxury items such as Rolex watches, gold bars, and Porches.
Top selling items in the second quarter included jewelry, home furnishings, small electronics, and hardware.
Known for its “treasure hunt” shopping experience, Costco focused on offering curated deals, James explained. Instead of stocking shelves with 120,000 items typically found at Walmart (WMT-1.27%), Costco offers a more streamlined selection of 3,400 items. Its private label, Kirkland Signature, was among the top sellers in 2024, as consumers increasingly opted for more affordable options to better manage high grocery prices.
Costco has also made headlines for its strong stance on Diversity, Equity, and Inclusion (DEI). Unlike many rivals, the company has doubled down on its DEI initiatives. In January, Costco rejected the use of quotas, opting instead to offer equal opportunities to its 300,000 employees.