Current:Home > StocksCostco membership growth 'robust,' even amid fee increase: What to know about earnings release -WealthDrive Solutions
Costco membership growth 'robust,' even amid fee increase: What to know about earnings release
View
Date:2025-04-12 17:44:12
Costco got off to a good start this holiday shopping season as the retailer racked up increased sales ahead of Black Friday and the official start of consumers' seasonal buying.
The members-only warehouse company also got a boost in revenue from higher membership fees, which it began charging in September – its first hike in membership fees in seven years.
Costco reported net sales of $61 billion, up 7.5% for the first quarter of the company's 2025 fiscal year, compared to $56.7 billion a year ago, the company said Thursday. The three-month period ended Nov. 24, a week before Black Friday.
"Seasonal sell-through appears to be very strong," said Gary Millerchip, Costco's chief financial officer and executive vice president, during a call with investment analysts Thursday. "People are very basic buying this year, but good trends."
Revenue from membership fees rose 7.6%, accounting for $1.17 billion, up from $1.08 billion a year ago, the company said.
Holiday deals:Shop this season’s top products and sales curated by our editors.
The price of an annual Costco membership rose from $60 to $65 for United States and Canada Gold Star memberships and executive memberships increased from $120 to $130, with the maximum annual 2% reward associated with the executive membership increasing from $1,000 to $1,250.
Costco reported revenue of $62.15 billion, up 7.5%, from a year ago. That's higher than the $61.9 billion estimated from Wall Street analysts polled by S&P Global Market Intelligence.
Membership fees brought in $4.8 billion in the previous fiscal year, which ended Sept. 1, 2024, and $1.5 billion for the previous three months, the company reported in September.
The company said it now had 77.4 million paid memberships, an increase of 7.6%. Nearly half (47%) were executive memberships.
More shoppers came to Costco
Costco, which sells products in bulk packages and has discounts on food including eggs for as low as $3, continued to see sales growth as consumers still remain concerned about prices.
With a shortened holiday shopping season, Costco joined other retailers in running pre-Black Friday sales in early November. Store traffic rose 5.1% during the period, while comparable tickets (individual customer sales totals) were up 0.1%, the company said.
"As consumers across income levels continue to prioritize value, Costco is benefiting from robust membership growth and is generating additional revenue from the recent membership fee increase," said Sky Canaves, principal analyst for retail and ecommerce at eMarketer, told USA TODAY.
"Among the major US retailers we track, Costco is one of the few that can boast of meaningful above-average ecommerce growth in 2024," Canaves said. "It's starting from a small base and still has a long runway to expand its online business with additional revenue opportunities coming from the marketplace and retail media network."
Costco exec: Sale of gold bars, precious metals drives traffic
Costco reported a 13% increase in ecommerce sales during the quarter, with top ecommerce sales categories including gift cards, hardware, home furnishing, health and beauty aids, sporting goods, and gold and jewelry. The company has had success selling gold bars, silver coins and, most recently, platinum bars.
Costco members can go to the website to purchase gold bars (currently priced at $2,749.99), platinum bars ($1,049.99), and silver coins ($649.99).
Having precious metals has driven "significant traffic" to the company's website, and "it's driving our ability to grow our digital business overall," Millerchip said.
In the previous quarter, Costco saw sales increase, but not as high as Wall Street had expected, suggesting consumers were spending with trepidation.
The company's shares, which are up 51% so far this year, rose nearly 1% in extended trading.
Contributing: Reuters
Follow Mike Snider on X and Threads: @mikesnider &mikegsnider.
What's everyone talking about?Sign up for our trending newsletter to get the latest news of the day
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
veryGood! (2417)
Related
- The FBI should have done more to collect intelligence before the Capitol riot, watchdog finds
- How Suni Lee Refused to Let Really Scary Kidney Illness Stop Her From Returning For the 2024 Olympics
- Mahomes, Purdy, Prescott: Who are the best QBs of the season? Ranking the top 10 before Week 17
- 'I just wasn't ready to let her go': Michigan woman graduates carrying 10-day-old baby
- 'Most Whopper
- Widower of metro Phoenix’s ex-top prosecutor suspected of killing 2 women before taking his own life
- Bill Granger, chef who brought Aussie-style breakfast to world capitals, dies at 54
- California man stuck in seaside crevasse for days is rescued in time for Christmas
- Warm inflation data keep S&P 500, Dow, Nasdaq under wraps before Fed meeting next week
- Students in Indonesia protest the growing numbers of Rohingya refugees in Aceh province
Ranking
- Tarte Shape Tape Concealer Sells Once Every 4 Seconds: Get 50% Off Before It's Gone
- Fentanyl is finding its way into the hands of middle schoolers. Experts say Narcan in classrooms can help prevent deaths.
- Thousands of Black children with sickle cell disease struggle to access disability payments
- US online retailer Zulily says it will go into liquidation, surprising customers
- Megan Fox's ex Brian Austin Green tells Machine Gun Kelly to 'grow up'
- 1-2-3 and counting: Las Vegas weddings could hit record on New Year’s Eve thanks to date’s pattern
- Horoscopes Today, December 24, 2023
- A Russian drone and artillery attack kills 6 in Ukraine and knocks out power in a major city
Recommendation
Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Triathlon
Health workers struggle to prevent an infectious disease 'disaster in waiting' in Gaza
Officer fatally shoots man who shot another person following crash in suburban Detroit
North Dakota Republican leaders call on state rep to resign after slurs to police during DUI stop
How to watch new prequel series 'Dexter: Original Sin': Premiere date, cast, streaming
Wolfgang Schaeuble, German elder statesman and finance minister during euro debt crisis, dies at 81
The death toll in a Romania guesthouse blaze rises to 7. The search for missing persons is ongoing
Anthropologie's End-of Season Sale is Here: Save an Extra 40% off on Must-Have Fashion, Home & More