At a time when stocks are tumbling and investors are running for cover, Costco’s earnings offered a ray of hope. Costco’s membership revenue hit $984 million in new membership fees in the third quarter, beating industry estimates.

Costco’s third-quarter earnings were broadly in line with Wall Street forecasts as the retailer used cheaper members-only gas sales to attract customers.

On May 26, Costco announced its results for the third quarter and first 36 weeks of 2022, which ended May 8.

Net income for the quarter was $1.353 billion, or $3.04 per diluted share.

Net sales for the quarter increased by 16.3% reaching $51.61 billion from $44.38 billion last year, beating Costco’s sales forecast. Analysts expected sales to hit $51.52 billion. Costco’s comparable sales were up 14.9% year over year, which is promising.

Net sales for the first 36 weeks rose 16.4% to $151.97 billion from $130.61 billion last year.

During the earnings call, Bob Nelson, senior vice president of finance and investor relations, told stakeholders that “pressures from rising commodity prices, rising wages, rising transportation costs and supply chain disruptions are still at stake.” He also revealed that candy, sundries, tires, toys, jewelry, newsstands, home furnishings, apparel, bakery and deli were the best performing categories in the third quarter, which impacted Costco’s revenue. Underperforming departments included liquor, office, sporting goods and hardware, all of which performed well last year.

Nelson admitted that gasoline, travel, food courts and business centers performed exceptionally well, adding to overall profits. The retailer hit an all-time high in renewal rates. In the United States and Canada, Costco’s membership revenue increased by 92.3%. In the third quarter, Costco had 64.4 million paying households and 116.6 million cardholders. A Costco membership costs around $60 for one year. For an extra $60 they can upgrade it to an executive membership. Nelson also addressed speculation around an increase in Costco’s membership revenue as costs are expected to rise this year. He mentioned that membership fee increases typically occur over a 5.5 year period and the last increase was in 2017. The company will make official announcements if and when it decides to change the current cost of membership.

Pretax profit for the quarter rose 11% to $1.827 billion from $1.65 billion a year ago.

Costco’s revenue growth is expected to continue, although high inflation and rising costs have forced giants like Walmart, Amazon and Target to cut their growth forecasts after disappointing first-quarter results. Record gasoline prices and inflation have eaten away at household budgets as people struggle to fend for themselves.

Costco’s revenue is a testament to its large customer base. Marshal Cohen, chief industry analyst for market research firm NPD Group, recently told CNBC that “the warehouse retailer isn’t spending money on advertising, but word of mouth can grow brand affinity between different communities”.

In Thursday’s session, Costco shares rose 5.65% but were marked down 1.7% after the close of trading following the earnings release.

The S&P 500 Retailing Group is down nearly 23.67% this quarter, its worst performance since 1990. However, investors expect things to get worse as the fight against inflation based on the Fed rates and rising gasoline prices will continue to impact household budgets and discretionary spending. Meanwhile, the Commerce Department reported that US retail sales stabilized slightly in April.

Costco will announce May sales results on June 2, after the market closes. Nelson also thanked Costco employees and partners for their dedication in this “most challenging environment” and mentioned that their hard work is evident in the strong operating results.