March 7 (Reuters) - Costco Wholesale missed market expectations for quarterly sales on Thursday, as consumers feeling the pinch of inflation cut back spending at the retailer, pulling its shares down 3.4% in extended trading.
With still-high interest rates and sticky inflation hammering household budgets, customers have kept a tight lid on their spending, particularly for big-ticket non-essential purchases such as home furnishings, sporting goods and garden supplies.
As a result, demand for the retailer's consumables, which had seen strong sales in previous quarters, had taken a hit.
The downbeat sales report echo comments from other retailers like Home Depot, which took a cautious stance for its 2024 outlook last month as it expects still elevated costs pressuring consumers to hurt its demand.
Costco posted total revenue of $58.44 billion in the second quarter, compared with analysts' estimates of $59.16 billion, according to LSEG data.
The company's net income rose 19% to $1.74 billion, or $3.92 per share, in the quarter ended Feb.18. Analysts on average expected a profit of $3.62 per share.
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