Costco says it saw 'record-breaking' gas volumes amid rising prices

Costco Wholesale on Thursday said it saw "record-breaking volumes" for gas in its fiscal third quarter amid rising fuel prices.

CEO Ron Vachris said the final five weeks of the quarter, which ended May 10, became Costco's top five volume weeks ever as customers searched for cheaper gas amid 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 on a call with analysts.

The company also said it saw first-time members coming to Costco for its gas stations during the quarter.

"We believe this will drive even greater loyalty with these members in the future, as members who use our gas stations typically spend more with us in the warehouse," he said.

The comments came as Costco reported an increase in net sales for its fiscal third quarter, beating Wall Street revenue expectations for the period.

The company reported net sales of $69.15 billion, up 11.6% from last year. It said adjusted comparable sales were up 6.6% for the quarter, with digital sales up nearly 21%.

Here's how Costco performed in its fiscal third quarter, compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

For the three-month period, Costco reported net income of $2.19 billion, or $4.93 per share, compared with $1.9 billion, or $4.28 per share, the year prior. Revenue rose to $70.53 billion from $63.2 billion in the year-ago period.

Costco said it saw paid memberships grow 4.1% for the quarter, along with a 37% increase in traffic on its website and app. Its top sales categories included pharmacy, home furnishings and gold and jewelry.

Costco has been at the forefront of a tariff dispute with the Trump administration after a Supreme Court decision invalidated some of President Donald Trump's levies on foreign imports. The retailer previously said it would lower its prices if it received tariff refunds following the Supreme Court decision.

On Thursday, Vachris said the company has begun submitting tariff refund claims and expects to receive refunds on its approved claims on a rolling basis over the next few months. Its plan is to return those funds to its members "in some form," though those details will depend on the actual returns, he added.

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

Analysts had previously expected the company to see higher demand at the onset of the war in the Middle East because of its cheaper gas prices and value offerings that appeal to a more cost-conscious consumer.