Core Viewpoint - Costco's financial performance in the fourth quarter reflects the resilience of its warehouse membership retail model in the current economic environment, with revenue and EPS growth exceeding expectations and strong demand for essential goods among consumers [8][10]. Financial Performance Summary - Revenue: In the fourth quarter, total revenue reached approximately $86.16 billion, a year-over-year increase of 8.1%, slightly above analyst expectations of $86.03 billion [4]. - EPS: Diluted EPS was $5.87, up nearly 11% year-over-year, surpassing the expected $5.80, although growth has slowed compared to the previous quarter's 13.2% [5][11]. - Same-store Sales: Adjusted for gasoline prices and foreign exchange, same-store sales grew by 6.4%, exceeding the expected 6.21%, while the previous quarter's growth was 8% [5][11]. Segment Performance Summary - Net Sales: Fourth-quarter net sales were approximately $84.43 billion, reflecting an 8% year-over-year increase, consistent with the previous quarter [6]. - Membership Fees: Membership fees totaled $1.724 billion in the fourth quarter, a 14% increase year-over-year, accelerating from the previous quarter's 10.4% growth [7][11]. - E-commerce: Excluding gasoline and foreign exchange impacts, e-commerce growth was 13.5%, down from 15.7% in the previous quarter but still above 10% [7][11]. Market Context and Competitive Position - Costco's strong sales growth is attributed to its competitive pricing, diverse product offerings, and popular private label brand, Kirkland, which attract consumers [12]. - The company demonstrates greater resilience to macroeconomic fluctuations compared to competitors, as its customers are required to pay membership fees and tend to be more affluent and loyal [12]. - Despite recent strong performance in the retail sector, concerns about inflation driven by tariffs and a weakening job market may challenge consumer confidence in the coming months [12]. Strategic Responses to Cost Pressures - In response to rising costs, Costco plans to maintain stable prices on certain products and may cease sales of items that become too expensive [13]. - The company is increasing local sourcing for products and enhancing in-store services, such as extended hours for premium members, to stimulate consumption [13]. - Competitors like Walmart's Sam's Club are also experiencing healthy sales growth, indicating a stable and rational consumer spending pattern despite price increases due to tariffs [13].