Costco delivers record profits with 20% increase in digital sales

Key takeaways

Costco Wholesale reported fiscal third-quarter earnings that exceeded analyst expectations, with profit increasing nearly 30% year over year.
Costco’s digital growth was a strength last quarter, with e-commerce sales up 20.7% compared to the same period a year earlier.
The retailer also expanded its partnership with Uber this quarter, allowing Costco products to be sold and delivered via Uber Eats.

Wholesaler Costco ( COST ) reported fiscal third-quarter earnings after the bell Thursday that topped analyst expectations, with sales up 9% year-over-year, driven by 20.7% growth in online sales.

The retailer reported total revenue of $58.52 billion, up just over 9% from last year’s third quarter and above the $57.92 billion expected by analysts, according to estimates compiled by Visible Alpha.

Net income was $1.68 billion, up nearly 30% year over year. Diluted earnings per share of $3.78 increased from $2.93 in the year-ago period. Both also beat analysts’ forecasts.

	Q3 2024	Analyst estimates for Q3 2024	Q3 2023
Income	$58.52 billion	$57.92 billion	$53.65 billion
Diluted earnings per share	$3.78	$3.68	$2.93
Net income	$1.68 billion	$1.63 billion	$1.3 billion

On Thursday, investors will hear for the first time from Costco’s new chief financial officer (CFO) about the company’s results, a position that was filled last quarter by former Kroger (KR) CFO Gary Millerchip. Longtime CFO Richard Galanti stepped down in March after nearly four decades as the retailer’s top CFO.

Costco is expanding its partnership with Uber Eats

In the weeks leading up to Costco’s earnings, the company expanded its partnership with Uber Technologies (UBER), and the ride-sharing company announced at an event earlier this month that Costco products can now be sold and delivered via Uber Eats, with in-store merchandise available to users. whether they have a Costco membership or not.

Uber executives said Costco members will receive special discounts through the Uber Eats app and will also be able to purchase a discounted Uber One membership, which offers discounted rides and free Uber Eats deliveries.

Costco has traditionally protected its members-only shopping experience, last year eliminating membership sharing – another topic on which executives were able to provide an update on Thursday’s earnings call.

Costco shares were down 1.8% in extended trading at $800.50 as of 5:30 p.m. ET on Thursday following the company’s earnings release.