Introduction to Costco’s Quarterly Earnings

The sign on the side of a Costco is seen in Hawthorne, California, on April 4, 2025. Costco on Thursday posted quarterly earnings and revenue that topped estimates as its sales climbed 8%.

Quarterly Earnings and Revenue

Here’s how the warehouse club retailer did in its fiscal third quarter compared to what Wall Street was expecting:

• Earnings per share: $4.28 vs. $4.24 expected
• Revenue: $63.21 billion vs. $63.19 billion expected

Net Income and Revenue Growth

Costco’s net income for the three-month period that ended May 11 rose to $1.90 billion, or $4.28 per share, compared to $1.68 billion, or $3.78 a year earlier. Revenue rose from $58.52 billion in the year-ago period.

Impact of Tariffs on Costco

As tariffs raise economic worries, and potentially consumer prices, Costco could stand to benefit. Unpredictable tariff policy could help drive more customers to the warehouse club, which is known for its competitive prices and bulk discounts, and encourage them to renew membership. Its clubs also sell discounted gas and groceries, which are steadier traffic drivers even when consumers pull back on spending. And compared with some other retailers, Costco has a stronger hand in price negotiations with suppliers because of its large size.

CEO’s Perspective

On the company’s earnings call in March, CEO Ron Vachris said customers rely on Costco more in a challenging economy. "In uncertain times, our members have historically placed even greater importance on the value of high-quality items at great prices, and our teams will continue to rise to this challenge by leveraging our global buying power, strong supplier relationships and innovation," Vachris said at the time.

Imports and Tariff Effects

About a third of Costco’s U.S. sales are goods brought in from other countries, with less than half of those imports coming from China, Mexico, and Canada, Vachris said in March. Yet tariffs could also add expenses for Costco, which could mean higher prices for shoppers.

Industry Comparison

Earlier on Thursday, Best Buy CEO Corie Barry said the retailer had already raised prices on some consumer electronics because of tariffs. Cosmetics company E.l.f. Beauty announced a price increase on its makeup last week. And Walmart CFO John David Rainey warned earlier this month that higher prices were coming to the discounter’s stores and website in late May or June.

Stock Performance

As of Thursday’s close, shares of Costco are up about 10% so far this year. That has outpaced the S&P 500’s less than 1% gains during the same period.

Conclusion

Costco’s quarterly earnings and revenue have topped estimates, with an 8% climb in sales. The company’s ability to negotiate prices with suppliers and its focus on value could help it navigate the challenges posed by tariffs. However, the impact of tariffs on consumer prices remains a concern.

FAQs

• Q: How did Costco perform in its fiscal third quarter?
  A: Costco posted quarterly earnings and revenue that topped estimates, with sales climbing 8%.
• Q: What is the impact of tariffs on Costco?
  A: Tariffs could drive more customers to Costco due to its competitive prices, but may also add expenses and lead to higher prices for shoppers.
• Q: How does Costco’s performance compare to the industry?
  A: Costco’s stock is up about 10% this year, outpacing the S&P 500’s gains, while other retailers like Best Buy and Walmart have announced price increases due to tariffs.
• Q: What did Costco’s CEO say about the company’s strategy?
  A: CEO Ron Vachris said customers rely on Costco more in challenging economic times and that the company will continue to leverage its global buying power and strong supplier relationships to offer value to its members.

Introduction to Abercrombie & Fitch’s Performance

Abercrombie & Fitch’s shares soared on Wednesday, despite the company slashing its profit outlook due to tariffs that are expected to hit its business by $50 million. The retailer is now expecting full-year earnings per share to be between $9.50 and $10.50, down from a previous range of between $10.40 and $11.40. Analysts were expecting earnings of $10.33 a share.

Financial Performance and Outlook

The company cut its operating margin forecast, another closely watched metric by investors. It’s now expecting its operating margin to be between 12.5% and 13.5%, down from a previous range of between 14% to 15%. The company’s guidance includes the estimated impact from tariffs that are currently in effect, including a 30% tariff on imports from China and a 10% levy on goods from dozens of other countries. It excludes other currently paused tariffs.

First-Quarter Results

Abercrombie reported fiscal first-quarter results that beat Wall Street’s expectations on the top and bottom lines. Here’s how the apparel company performed in the fiscal first quarter compared with expectations:

• Earnings per share: $1.59 vs. $1.39 expected
• Revenue: $1.10 billion vs. $1.07 billion expected
  The company’s reported net income for the three-month period that ended May 3 was $80.4 million, or $1.59 per share, compared with $114 million, or $2.14 per share, a year earlier.

Sales Performance

Sales rose to $1.10 billion, up about 8% from $1.02 billion a year earlier. In a news release, Abercrombie said sales reached a record high for the fiscal first quarter. "This was above our expectations and was supported by broad-based growth across our three regions," CEO Fran Horowitz said in a statement. Hollister brands led the performance with growth of 22%, achieving its best ever first quarter net sales, while Abercrombie brands net sales were down 4% against 31% sales growth in 2024.

Guidance and Expectations

Beyond its profit outlook, Abercrombie slightly raised its full-year sales guidance and is now expecting revenue to rise between 3% and 6%, up from a previous range of between 3% and 5%. That’s largely ahead of expectations of 3.3% growth. For its current quarter, Abercrombie anticipates sales will rise between 3% and 5%, which is in line with expectations of 4.7% growth at the high end. The company expects its operating margin to be between 12% and 13%, lower than expectations of 14.1%. It anticipates earnings per share will be between $2.10 and $2.30, below expectations of $2.50.

Mitigating Tariff Impact

On a call with analysts, finance chief Robert Ball said Abercrombie expects a $70 million hit from tariffs, but will lower it to $50 million through mitigation. To offset the duties and maintain profits, the company is not planning "broad-based" price increases, but is working with its vendors to offset costs and looking to diversify its sourcing network. "The more diversified we get, the faster that we can be," Ball said. "We’re looking for expense reductions … across the business, but we’re doing that with a very clear eye to protecting long-term investments for the business, because we just see a ton of opportunity for these brands globally and longer term. So it’s a very cautious approach."

Brand Performance

Abercrombie sourced about 30% of its products from China before the pandemic, but that number is now in the low single digits, said Ball. Its biggest trading partners are now Vietnam, Cambodia, and India, which would all face tariffs between 26% and 49% under President Donald Trump’s April proposal. Abercrombie’s weak guidance largely reflects how tariffs will cut into its profits, but its sales are also expected to take a hit as it contends with a slowdown at its namesake banner. Abercrombie’s eponymous chain fueled its historic comeback over the last few years, but sales fell 4% at the brand in the first quarter, following 31% growth in the year-ago period. Meanwhile, comparable sales for the Abercrombie brand plunged 10%.

Future Plans

The company is also lapping the strong launch of its wedding shop in the year-ago period. The product launch included dresses and outfits for all of the occasions surrounding the modern-day wedding, such as the rehearsal dinner, the morning after brunch, and the bachelorette trip. To build on the success of wedding apparel, Abercrombie launched its vacation shop this year, which Horowitz expects will be a growth driver for the company. She expects the Abercrombie brand to return to growth in the back half of the year.

Conclusion

Abercrombie & Fitch’s performance and guidance reflect the challenges posed by tariffs and a slowdown in its namesake brand. However, the company’s efforts to diversify its sourcing network, mitigate tariff impacts, and drive growth through its Hollister brand and new product launches are expected to support its long-term prospects.

FAQs

Q: What is Abercrombie & Fitch’s revised profit outlook?
A: Abercrombie & Fitch is now expecting full-year earnings per share to be between $9.50 and $10.50, down from a previous range of between $10.40 and $11.40.
Q: How much is Abercrombie expecting to be hit by tariffs?
A: Abercrombie expects a $70 million hit from tariffs, but will lower it to $50 million through mitigation.
Q: What is driving Abercrombie’s growth?
A: Hollister brands led the performance with growth of 22%, achieving its best ever first quarter net sales.
Q: Is Abercrombie planning to increase prices due to tariffs?
A: The company is not planning "broad-based" price increases, but is working with its vendors to offset costs and looking to diversify its sourcing network.
Q: What are Abercrombie’s expectations for its current quarter?
A: Abercrombie anticipates sales will rise between 3% and 5%, and expects its operating margin to be between 12% and 13%.

Introduction to JPMorgan’s New Branch Format

JPMorgan Chase thinks it has cracked the code on managing more money for America’s millionaires. It’s not a new financial product, a novel software program, or an enticing sign-up bonus. Instead, it’s a refurbished take on an old concept — the brick-and-mortar bank branch — along with new standards for service that are at the heart of its aspirations.

The New Branches

The bank is unveiling 14 of these new format branches — each acquired when JPMorgan took over First Republic in 2023 — in tony ZIP codes in New York, California, Florida, and Massachusetts, including Napa, Palm Beach, and Wellesley Hills. It’s part of JPMorgan’s push to convince affluent Americans, many who already use Chase checking accounts or credit cards, that the bank is ready to manage their millions.

JPMorgan’s Position in Wealth Management

JPMorgan is the country’s biggest bank by deposits and assets and has a top share in areas as disparate as Wall Street trading and retail credit cards. But one of the only major categories where it isn’t a clear leader is in wealth management; peers like Morgan Stanley and Bank of America exceed it there. While half of the 19 million affluent households in the U.S. bank with JPMorgan, it has just a 10% share of their investing dollars, according to Jennifer Roberts, CEO of Chase Consumer Banking.

The Opportunity for Growth

"We have this giant opportunity to convince customers to have their wealth management business with us in addition to their deposit relationship," Roberts said in a recent interview. Helped by its acquisition of First Republic, which was known for catering to rich families living on either coast, JPMorgan decided to launch a new tier of service. Called J.P. Morgan Private Client, it is anchored by the new physical locations, of which there will be 31 by the end of next year.

The J.P. Morgan Private Client Experience

The service comes with its own mobile banking app, but its main appeal is the in-person experience: Instead of being handed off to multiple employees like at a Chase branch, J.P. Morgan Private Client members are assigned to a single banker. "What First Republic did really well was deliver a concierge-level of service where if you have an issue, a person owned it for you and you didn’t have to worry about it," Roberts said. The price of entry: at least $750,000 in deposits and investments, though Roberts said the bank is aiming for those with around $2 million to $3 million in balances.

Quiet Opulence

The new locations, dubbed J.P. Morgan Financial Centers, have a warm feel and an earth-tone color palette that intentionally sets them apart from the nearly 5,000 Chase branches operated by the bank. During a recent visit to a Manhattan location, the vibe is family office-meets hotel, with soaring ceilings, living room-style seating areas, and art-filled meeting rooms scattered over two floors. Gone is the traditional row of bank tellers; there is instead a concierge desk and a solitary ATM machine.

The Design and Environment

The design elements and hushed environment are "really meant to illustrate that we’re there to have a more serious, less-transactional conversation about your wealth planning over the course of time," said Stevie Baron, JPMorgan’s head of affluent banking. Those conversations involve planning for long-term goals and examining clients’ portfolios to see whether they are on track to reach them, he said. Elements of the new high-end branch format could find their way to regular Chase branches, especially the 1,000 or so that are in high-income areas, Baron said.

Challenges and Expectations

JPMorgan executives have said the bank’s branch network has already succeeded as a feeder into the firm’s wealth management offerings. The new service tier — which sits above the bank’s Chase Private Client offering, which is for those with at least $150,000 in balances and is delivered in the regular branches — is expected to help JPMorgan’s retail bank double client assets from the $1.08 trillion it reached in March. "Obviously it’s a big challenge, because clients already have their established wealth managers, but it’s something that we’ve been making really strong progress in," Roberts said.

Creating Awareness

But attempting to create a new, more luxurious brand from a mainstream one — think the difference between Toyota and its luxury brand Lexus — is not without its risks. Or at least, momentary confusion. So far, the two flagship financial centers in New York and San Francisco opened late last year haven’t seen heavy foot traffic, Roberts admitted. "Our biggest challenge is that we don’t have people walking in because they don’t really understand what they are," Roberts said. "So we just need to get the awareness out there."

Conclusion

JPMorgan’s new branch format and service tier are part of its efforts to increase its share in the wealth management market. With its focus on providing a high-end, concierge-like experience, the bank aims to attract and retain affluent clients. While there are challenges to creating awareness and differentiating the new brand, JPMorgan is confident in its ability to deliver a unique and valuable experience to its clients.

FAQs

Q: What is JPMorgan’s new branch format?
A: JPMorgan’s new branch format is a refurbished take on the traditional brick-and-mortar bank branch, with a focus on providing a high-end, concierge-like experience for affluent clients.
Q: What is the price of entry for J.P. Morgan Private Client?
A: The price of entry for J.P. Morgan Private Client is at least $750,000 in deposits and investments, though the bank is aiming for those with around $2 million to $3 million in balances.
Q: How many new branches will JPMorgan open?
A: JPMorgan will open 31 new branches by the end of next year, with 14 of them being unveiled in the initial launch.
Q: What is the goal of JPMorgan’s new service tier?
A: The goal of JPMorgan’s new service tier is to help the bank’s retail bank double client assets from the $1.08 trillion it reached in March.
Q: How will JPMorgan create awareness for its new branch format?
A: JPMorgan will create awareness for its new branch format through various marketing efforts, including promoting the unique experience and services offered by the new branches.