Costco Wholesale Corp has reported first-quarter results that missed analysts' estimates, with surging inflation pushing consumers to cut back spending and as operating expenses increased for the company.
Retailers Target Corp and Dollar Tree Inc also said in November that stubbornly high inflation and changes in consumer spending were driving down demand for discretionary goods such as toys and electronics.
Costco's total revenue for the first quarter was $54.44 billion (€51.6 billion), compared with estimates of $54.64 billion (€51.7), according to Refinitiv IBES data.
The warehouse club operator's merchandise costs rose about 9% to $47.77 billion (€45.2 billion) as it grapples with higher freight and labour costs.
On an adjusted basis, the company earned $3.10 per share, missing estimates of $3.11.
The company's quarterly revenue from memberships, priced between $60 and $120 per year and which accounts for most of Costco's gross margin, rose to $1 billion (€950 million) from $946 million (€895.8 million).
The company's e-commerce unit saw comparable sales down 2% on an adjusted basis.
In September, Costco topped estimates for its fourth-quarter results, helped by strong demand for its fresh food, confectionery and fuel offerings despite rising inflation.
Currently, the company operates 847 warehouses, including 583 in the United States and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 18 in Korea, 14 in Taiwan, 14 in Australia, four in Spain, two each in France and China, and one each in Iceland, New Zealand and Sweden.
It also operates e-commerce sites in the US, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.