Costco misses revenue estimates as shoppers curb non-essential spending

FILE PHOTO: People form a long queue as they wait for the Costco wholesalers to open in Manchester, Britain

(Reuters) -Costco Wholesale Corp missed estimates for quarterly revenue on Thursday as its customers cut back on non-essential purchases in the face of persistently high inflation, sending its shares down 2% in extended trading.

With shoppers prioritizing their spending on food and staples, one-stop retailers such as Costco are experiencing a drop in demand for high-margin discretionary items such as home furnishings, jewelry, toys and consumer electronics.

The warehouse club operator’s total revenue for the third quarter was $53.65 billion, compared with the estimates of $54.57 billion, according to Refinitiv data.

Net income attributable to Costco fell to $1.30 billion, or $2.93 per share, in the quarter ended May 7 from $1.35 billion, or $3.04 per share, a year earlier.

Costco’s quarterly revenue from memberships – priced between $60 and $120 per year and which account for most of Costco’s gross margin – however, rose to $1.04 billion from $984 million, a year ago.

(Reporting by Granth Vanaik in Bengaluru; Editing by Anil D’Silva)