By Sabrina Escobar

After a strong start to the year, Costco Wholesale is finally seeing consumer demand start to weaken.

Costco's sales in April rose 7% from a year ago to $21.2 billion, marking a slight deceleration from March's 8.6% increase.

Same-store sales increased 4.4% year over year in April, slowing from a 6.4% gain in March.

There were certain mitigating factors that Costco pointed to for the softer results. For one, April had one less shopping day compared than in 2024, which negatively affected total and same-store sales by about 1.5 to 2 percentage points, the company said.

Unfavorable foreign-exchange rates and lower gasoline prices also dragged on Costco's sales growth. The worldwide selling price per gallon was down 13.4% from last April.

But even stripping out fluctuations in gasoline prices and foreign exchange rates, same-store sales rose 6.7%, compared with a 9.1% jump in March. Meanwhile, Costco's comparable foot traffic, which measures store visits, was up 4.2% worldwide, down from 6.1% last month.

Both measures suggest that overall demand was softer in April. That follows three months of solid outperformance, in which Costco's foot traffic largely outpaced many of its peers.

Shares of Costco were up 0.1% to $1,008.25 in after-hours trading. Shares have gained about 10% this year, while the S&P 500 has shed 4.3%. Many investors continue to see Costco as a haven from a potential recession, given the company's membership model and focus on value. And to be sure, even though April's sales grew less quickly than earlier this year, they still increased at a healthy clip.

Costco could also be more insulated from tariffs. Executives have said that imported goods account for about one-third of Costco's sales in the U.S. Less than half of those are items coming from China, Mexico, and Canada.

Investors will be looking for more commentary about tariffs and consumer spending when the company reports its fiscal third-quarter results at the end of May.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

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May 07, 2025 16:59 ET (20:59 GMT)

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