Costco Misses Revenue Estimates Amid Choppy Big-Ticket Spending

Costco Wholesale has missed market expectations for fourth-quarter revenue, hurt by cautious consumer spending on pricier items at its membership-only stores and lower gasoline prices, Juveria Tabassum reported for Reuters.

Consumer spending on furniture, home goods, and sporting goods has been choppy, negatively impacting sales at Costco's warehouses. I Photo: Costco Wholesale

While ultra-low prices are driving demand for groceries and kitchen staples, consumer spending on furniture, home goods, and sporting goods has been choppy, negatively impacting sales at Costco's warehouses.

"There are definitely some signs that consumers are being very selective in how they spend their dollars," Chief Financial Officer Gary Millerchip said on a post-earnings call.

Customers were looking for more deals, and the appliances and electronics categories became more promotional over time, Millerchip added.

Online shopping is also boosting sales for retailers as consumers increasingly seek the convenience of choice and delivery.

"Shoppers have not run out of steam but are redistributing their spending between various physical and online retailers," said Michael Ashley Schulman, Chief Investment Officer at Running Point Capital Advisors.