ISSAQUAH, Washington: Costco is feeling the pinch from tariffs and soft consumer spending, missing Wall Street’s revenue expectations for the third quarter despite strong sales of essentials and private label goods.

According to LSEG data, the company posted revenue of US$61.96 billion for the quarter ended May 11, up eight percent from a year earlier but below the $63.19 billion analysts had forecast. Still, earnings per share came in slightly ahead of expectations at $4.28 versus the $4.24 estimated.

Facing U.S. tariffs and supply chain pressures, Costco said it had accelerated imports of some goods it had planned to bring in later this summer to mitigate the impact of those tariffs. The retailer also rerouted many products away from its U.S. markets to overseas locations where tariffs are less of an issue.

Despite those challenges, Costco is holding firm on pricing—at least for now. “Raising prices would be a last resort,” the company said on its post-earnings call, drawing a contrast with rival Walmart, which has warned it will begin hiking prices later this month. Target, meanwhile, has opted not to raise prices but slashed its annual outlook instead.

Costco’s bulk-buying model and value-focused private labels continue to attract price-conscious consumers, especially as inflation lingers. Same-store sales, excluding fuel, rose eight percent—beating estimates of a 6.96 percent gain.

“As inflation and supply chain concerns drive more consumers to buy in bulk, warehouse clubs like Costco are gaining traction,” said Zak Stambor, analyst at eMarketer.

However, broader economic uncertainty is weighing on the retail sector. U.S. consumer sentiment hit a near three-year low in May, reflecting cautious spending patterns that have impacted many retailers’ bottom lines.

Costco shares, which have gained about 10 percent so far this year, were flat in extended trading after the earnings release.