(Bloomberg) -- Costco Wholesale Corp. posted higher-than-expected profit, a sign that consumer spending is staying robust despite persistent cost pressures.
The big-box retailer reported earnings of US$5.29 per share during the quarter ended Sept. 1, higher than the average estimate of Wall Street analysts. The shares slipped less than 1% in late trading. The stock has risen 37% year-to-date through Thursday’s close.
Shopper traffic increased in the US from a year earlier during the quarter, although visitors spent slightly less per trip, according to a presentation accompanying the company’s earnings report. Costco said it gained more paid members, and roughly 90% renewed their membership during the quarter.
The company, which already posted sales for the period in monthly releases, has historically been insulated from macroeconomic challenges given that its shoppers pay membership fees and tend to be more affluent. US comparable sales rose 5.3% for the period. By that same measure, e-commerce surged nearly 19%.
Non-food items have been among recent areas of growth for Costco, which is investing to further develop online sales under its new management team. The company listed appliances, gold and silver bullion, home furnishings and gift cards as its top categories for online sales.
Chief Executive Officer Ron Vachris, a longtime veteran of the company, took over at the start of the year, while Chief Financial Officer Gary Millerchip joined Costco from Kroger Co. in March.
US retailers have posted a quarter of mixed results, showing consumers are being selective and making trade-offs ahead of the holiday season. Early projections on holiday spending point to a slight increase in store sales and a bigger jump in online spending.
Walmart Inc. and Target Corp. said shoppers are focusing on buying essentials, but noted there haven’t been any new signs of pullback. Home Depot Inc., however, said consumers are deferring large purchases due to economic uncertainty, while dollar stores have said lower-income shoppers are under pressure.
Costco raised its membership fees in the US and Canada this month. It will likely take months to see how the change will affect renewal rates or sign-ups.
Investors will be listening during the company’s upcoming earnings call for commentary on store traffic and an outlook for the yearend holiday season.
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