06:38 AM EST, 12/13/2024 (MT Newswires) -- Costco Wholesale's ( COST ) fiscal first-quarter earnings came in ahead of market estimates while the warehouse chain's overall revenue and comparable sales missed Wall Street expectations.

Net income advanced to $4.04 per share for the quarter ended Nov. 24 from $3.58 a year earlier, the company said late Thursday, topping the FactSet-polled consensus of $3.76. Sales rose 7.5% year over year to $60.99 billion, while total revenue increased to $62.15 billion from $57.8 billion last year. The Street's forecast was for revenue of $62.18 billion.

Comparable sales rose 5.2% in the quarter, but missed the 5.9% growth modeled by analysts. "Foreign currencies relative to the US dollar negatively impacted sales by approximately 0.3%, while gas price deflation negatively impacted sales by approximately 1.6%," Chief Financial Officer Gary Millerchip said during an earnings call, according to a FactSet transcript. Comparable sales increased 5.2% in the US, 5.8% in Canada and 4.7% internationally.

"The company continues to deliver strength across categories, with fresh foods and non-foods up (high-single-digits) in the quarter as the offerings are resonating across the board with consumers who have become increasingly selective in their spending," Truist Securities said in a Thursday client note. "That said, while the business remains strong, we believe that (even for Costco), the valuation has become extremely stretched."

Costco's traffic, or shopping frequency, increased 5.1% globally and 4.9% in the US, according to Millerchip. The average transaction nudged 0.1% higher worldwide and 0.3% in the US, including headwinds from gas deflation and foreign exchange, the CFO said on the call.

E-commerce comparable sales jumped 13%, buoyed by traffic, conversion rates and average order value. "While strength in volume was a meaningful tailwind to e-commerce sales, hardware, sporting goods, gift cards, and home furnishings all grew double digits year-over-year," Millerchip told analysts.

Costco ended the quarter with 77.4 million paid household members and 138.8 million cardholders, both reflecting annual gains of more than 7%, Millerchip said. The US and Canada renewal rate came in at 92.8%, down 0.1% from the previous three-month period, while the worldwide rate fell 0.1% to 90.4%.

Gross margin rose by 24 basis points year over year to 11.3%. Merchandise costs increased to $54.11 billion from $50.46 billion in the prior-year quarter. Selling, general and administrative expenses rose to $5.85 billion from $5.36 billion last year.