After Thursday's U.S. stock market close, Costco (COST.US) released its fiscal fourth-quarter results for the period ended August 30. Total fourth-quarter revenue rose 11% year over year to $95.72 billion, beating market expectations, while adjusted earnings per share came in at $6.57, also ahead of forecasts, with tariff refunds contributing 15 cents per share to EPS.

In the fourth quarter, membership fee revenue increased 7% to $1.85 billion, slightly above market expectations. However, the growth in paid membership numbers during the same period fell short of expectations. The company's shares moved little in after-hours trading.

As a large warehouse retailer operating more than 900 stores worldwide, Costco has built its edge on competitive prices, bulk-sized products, and merchandise that is hard to find elsewhere. Its limited-selection model, which focuses on only a few choices per category, allows it to respond flexibly and efficiently to tariffs and other macroeconomic challenges.

Executives said on a Thursday conference call with analysts that Costco's gasoline and travel businesses performed well, while home goods, small electronics, and beauty products also drove sales growth. Adjusted same-store sales rose 6.7% in the quarter, better than expected.

Executives said the company received $184 million in tariff refunds last quarter and a roughly similar amount in the current quarter. The company is mainly using the refund proceeds to lower prices on items such as meat, produce, beverages, and household goods.

Chief Financial Officer Gary Millerchip said food inflation has held at similar levels in recent months. Prices for some non-food products have risen due to higher memory chip costs and higher oil prices caused by Middle East conflict.

The company said younger consumers continue to join Costco, with the number of members under 40 up nearly 60% since the pandemic. This group now accounts for more than 25% of Costco shoppers. Chief Executive Officer Ron Vachris said they initially spend less but eventually accelerate their spending.

In recent years, Costco has sought to expand its digital footprint through partnerships with third-party delivery companies such as Instacart, DoorDash, and Uber Technologies. The company's e-commerce segment is growing faster than other areas and is helping attract younger shoppers. On a comparable basis, digital sales rose nearly 20%.

In recent months, consumer confidence has remained weak due to high oil prices and inflation. This has sparked increasingly fierce competition, with companies trying to attract price-sensitive shoppers through the right product mix. Walmart, Kroger, and Albertsons are using tariff refunds to fund price-cutting measures.