(Reuters) -Costco Wholesale surpassed market expectations for quarterly sales on Thursday, as more customers turning to its stores for cheaper groceries and essentials offset slowing demand for discretionary items.
The membership-only retail chain’s shares, which have risen 38% this year, were up 1.7% in extended trading.
Costco has increased its sales and market share thanks to its strategy of maintaining low prices on basic essentials and gas as well as a devoted membership base that benefits from incentives including testing of free samples and a yearly 2% reward on qualified purchases at its warehouses.
The one-stop retailer has seen sales surge for its consumable categories like fresh food and sundries as well as its private-label brand Kirkland Signature, even as non-food categories including sports goods and office supplies have come under pressure due to persistent inflation.
Total revenue at the company rose to $57.8 billion in the first quarter, compared to analysts’ estimates of $57.72 billion, according to LSEG data.
Net income attributable to Costco rose to $1.59 billion, or $3.58 per share, in the quarter ended Nov.
26, from $1.36 billion, or $3.07 per share, a year earlier.
(Reporting by Granth Vanaik in Bengaluru; Editing by Maju Samuel)
