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Costco Wholesale, which is headquartered in Issaquah, Wash., posted a sales increase of 2% year-over-year, with revenue hitting $53.65 billion.

Costco sales increase, but forecast missed

Segment data revealed all gains except in e-commerce

Costco Wholesale, which is headquartered in Issaquah, Wash., posted a sales increase of 2% year-over-year, with revenue hitting $53.65 billion. However, these gains still missed analysts’ expectations of $54.58 billion, as discussed on its latest earnings call.

Consumer spending on bulk items slowing in the face of elevated inflation and an uncertain job market are a couple of reasons cited for the miss, according to The Street. 

“Again, sales growth — there's no big single item that was an outlier there. But sales growth overall, in my view, was the impact,” said Richard Galanti, director, executive vice president, and chief financial officer of Costco, according to the earnings call transcript.

While Galanti’s sentiment remains positive, the wholesale retailer’s segment data revealed gains nearly everywhere except in e-commerce, which is not a surprise considering how its online sales dropped nearly 6% just in April alone. The superstore had a 5.9% decline in e-commerce business in April compared to April 2022. During this earnings call, however, Costco reported a 9% slip for e-commerce. 


Galanti explained, “In Q3, big-ticket discretionary departments … were down about 20% in e-commerce and made up 55% of e-commerce sales. These same departments were down about 17% in the warehouse, but they only make up 8% in warehouse sales.”

U.S. comparable sales were up 1.8% and Canadian sales gained 7.4%. International sales added 8.4%, and total company comparable sales were up 3.5%. Net sales, meanwhile, were up 1.9% overall against this time last year.


Other notable numbers from the earnings call included: 

  • Membership revenues rose 6.1% to $1.04 billion
  • Average daily transactions were down 3.5% in the U.S., and 4.2% worldwide over the quarter

Galanti also talked about the impact of slower sales growth mixed with wage increases that Costco did out of the norm. That included the impact of four weeks of wage and benefits increases implemented last March, the additional top-of-scale increase that went into effect July 4, and eight weeks of this March is higher than normal top-of-scale increase. 

“Despite the slowing sales growth, we've continued to invest in our employees over the past year, and that's always been a priority for us,” he said.

In this quarter, the topic of inflation is estimated by Galanti to be in the 3% to 4% range (year-over-year). He added that Costco continues to see improvements in many food items (like nuts, eggs, and meat) and items that include commodities like steel and resins on the nonfood side (as part of their components). As for inventory levels, “Inventories overall are in pretty good shape,” he closed.

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