On Thursday, Costco Wholesale Corporation (COST  ) issued its fiscal fourth quarter earnings. While slightly coming short on revenue, the warehouse retailer's earnings topped Wall Street estimates.

Fiscal Fourth Quarter Highlights

For the quarter ended on September 1, revenue rose just 1% YoY to $79.7 billion, slightly below Bloomberg's estimate of $79.96 billion.

Membership fee revenue ticked up slightly to $1.51 billion. Despite increasing 18.9 YoY, e-commerce sales came short of estimates as growth slowed down from the previous quarter when they exceeded 20% with growth of 20.7% to be exact. Same-store sales grew 5.3% in the U.S. and 5.5% in Canada.

Net income grew 7% YoY to $2.35 billion with adjusted earnings being $5.29 per share, topping Bloomberg' estimate of $5.07 per share. Strong customer engagement was reflected in a 6.4% rise in worldwide traffic.

Like its rival, Walmart (WMT  ), Costco is continuously working on enhancing the experience of its shoppers. Like Walmart, Costco is expanding its footprint. With a thriving business model. Both Walmart and Costco have been working on boosting e-commerce sales in attempt to rival Amazon.com (AMZN  ), with e-commerce being a significant growth driver for all retailers. But despite efforts, Costco's e-commerce sales growth slowed down. Yet, unlike Walmart, Costco has a special bonus, its subscriptions. It can even be said that what Costco really sells is its memberships as it makes most of its money from them.

The Impact Of The Membership Fee Hike Is Still Unknown

This was the first quarter since the warehouse retailer rose its membership fees. While the recent hike did not impact the reported period but going forward, it could drag down Costco's results.

On September 1, Costco rose the price of its Gold Star membership by $5, and of its Executive membership by $10. This is the first time Costco raised its membership fees since 2017, impacting about 52 million memberships, with Executive memberships being a little over half of those. Therefore, Costco expects membership income growth in high single to low double digits. But as for the latest reported quarter, a small revenue miss was more than offset by strong profitability.

Overall, Costco showed that while increasingly cautious, consumers are merely distributing as spend without running out of steam.

Unlike Amazon that has a business empire across industries, spanning from e-commerce to the cloud, advertising, in addition to unlocking new opportunities to AI, Costco's only business is retail. But, its business model is reliable and lucrative, and the latest quarter shows it is still working beautifully.