(Reuters) – Costco Wholesale beat expectations for third-quarter revenue on Thursday as cash-strapped consumers flocked to its warehouses to stock up on inexpensive groceries and discretionary items.
The membership-only retailer saw strong demand for its groceries and baked goods as consumers struggling with the still-high cost of living chose to cook more meals at home.
As consumers purchased value-priced items across all product categories, the company also saw strong demand for its value-priced discretionary products.
Earlier this month, retail leader Walmart (NYSE:) beat quarterly forecasts and forecast positive full-year targets, helped by strong demand for lower-priced products and expectations of a rebound in demand for essential goods.
However, another, larger company, Target, reported a weak quarter due to weak consumer spending.
Costco’s total revenue for the quarter ended May 12 was $58.52 billion, compared with analysts’ average estimate of $58.07 billion, according to LSEG.
The company also reported earnings of $3.78 per share, beating estimates of $3.70.
“Over the past two years, consumers have become increasingly value-conscious, and this trend does not appear to be abating anytime soon. If that’s the case, Costco should benefit for years to come,” said Blake Drosh, an analyst at eMarketer.
In the first quarter, visits to Costco Wholesale (NASDAQ:) were up 8.9% year-over-year, while visits to Walmart and Target were up 3.9% and 3.5%, respectively, according to Placer.ai.
The company’s total comparable sales for the quarter rose 6.5% on an adjusted basis, compared with growth of 3.5% last year.
Costco’s comparable e-commerce sales rose 20.7% in the current quarter after falling 10% last year.