Costco sees record gas volumes as prices rise

Costco Wholesale reported record gasoline sales in its fiscal third quarter.

Customers searched for cheaper fuel amid rising prices and the war in the Middle East.

“Against the backdrop of ongoing macro uncertainty, our focus is providing quality goods and services at the lowest possible price,” Vachris said.

Vachris said on a call with analysts.

The company also saw first-time members coming to its gas stations during the quarter. Vachris said these members typically spend more in the warehouse over time, driving greater loyalty. Its gas stations have been a key draw for new members.

Record gas volumes draw new members

The company reported net sales of $69.15 billion, up 11.6% from a year earlier. Adjusted comparable sales rose 6.6%, with digital sales surging nearly 21%. Net income was $2.19 billion, or $4.93 per share, compared with $1.9 billion, or $4.28 per share, last year. Revenue hit $70.53 billion, beating Wall Street expectations based on a survey of analysts by LSEG.

Paid memberships grew 4.1% during the quarter.

Traffic on its website and app jumped 37%. Top sales categories included pharmacy, home furnishings, and gold and jewelry. The pharmacy category saw strong demand, though executives did not provide specific details.

Among the top-selling categories was gold and jewelry, a sign that consumers are still spending on discretionary items despite inflation.

But Costco didn’t break out specific sales figures for that category.

Tariff refunds could lower prices

Costco has been involved in a tariff dispute after a Supreme Court decision invalidated some of President Donald Trump’s levies on foreign imports. It previously said it would lower prices if it received tariff refunds. On Thursday, Vachris said the company has begun submitting claims and expects to receive them on a rolling basis over the next few months. The retailer plans to return those funds to its members “in some form,” though details depend on actual returns.

“Our goal is to be the first to lower prices and the last to raise them,” Vachris said.

The record gas volumes suggest that trend is playing out.

Analysts had expected higher demand at the onset of the war in the Middle East because of Costco’s cheaper gas and value offerings that appeal to cost-conscious consumers. With those refunds, the retailer may be able to further lower prices, potentially attracting even more members.

Vachris also noted that Costco’s focus on low prices extends beyond gas. “We’re seeing strong traffic across our warehouses, and that’s being driven by our value proposition,” he said. The retailer’s ability to keep prices low has been a key factor in its consistent growth, even as other retailers struggle with inflation.