FILE PHOTO: A shopper pushes a shopping cart at a Costco store ahead of Black Friday in Arlington, Virginia, U.S., November 27, 2024. REUTERS/Benoit Tessier/File Photo

By Anuja Bharat Mistry

-Costco Wholesale beat fourth-quarter revenue and profit estimates on Thursday, as Americans hunting for bargains flocked to the membership-only retail chain to snap up lower-priced essentials.

With household budgets under pressure due to rising inflation, triggered by tariffs, and a weakening labor market, consumers are increasingly seeking value, which has helped retailers such as Costco buck the broader industry slowdown.

The company has also been drawing in more customers by leaning on its flagship private label, Kirkland Signature, while consistently keeping prices low on certain items, such as butter and eggs, and extending gas station hours.

"Costco appears to be reinvesting part of last year's membership fee increase into sharper pricing for members while allowing the remainder to flow through to the bottom line, a win-win for both members and shareholders," said Arun Sundaram, analyst with CFRA Research.

The company, which hiked its membership fee last year to $65 for Gold Star members and $130 for Executive members, saw its earnings from the fees rise 14% to $1.72 billion in the reported quarter.

Its revenue came in at $86.16 billion for the three months ended August 31, compared with analysts' average estimate of $86.06 billion, according to data compiled by LSEG.

Total same-store sales, excluding gas, rose 6.4%, compared with estimates of a 6.44% increase.

U.S. grocer Kroger and retail behemoth Walmart also saw their sales rise, due to a surge in demand for value products from customers across all income levels.

Shares of Costco, which rose about 3% so far this year, were down 1% after the bell.

Excluding items, the company earned a quarterly profit of $5.87 per share, compared with analysts' average estimate of $5.80.

(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shinjini Ganguli)