Current:Home > ScamsCostco membership growth 'robust,' even amid fee increase: What to know about earnings release -MacroWatch
Costco membership growth 'robust,' even amid fee increase: What to know about earnings release
Burley Garcia View
Date:2025-04-06 23:42:51
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! (2998)
Related
- What to watch: O Jolie night
- Blast inside Philadelphia apartment injures at least 1
- Miss the halftime show? Watch every Super Bowl 2024 performance, from Usher to Post Malone
- Nearly half of the world’s migratory species are in decline, UN report says
- Where will Elmo go? HBO moves away from 'Sesame Street'
- Dora the Explorer Was Shockingly the Harshest Critic of the 2024 Super Bowl
- 'It's a love story': Taylor Swift congratulates Travis Kelce after Chiefs win Super Bowl
- Stock market today: Asian markets mixed, with most closed for holidays, after S&P 500 tops 5,000
- US wholesale inflation accelerated in November in sign that some price pressures remain elevated
- Republican Michigan lawmaker loses staff and committee assignment after online racist post
Ranking
- The Best Stocking Stuffers Under $25
- All about Lift Every Voice and Sing, known as the Black national anthem, being sung by Andra Day at the 2024 Super Bowl
- Alix Earle Reveals Why Dating With Acne Was So Scary for Her
- Can candy be a healthy Valentine's Day snack? Experts share how to have a healthy holiday.
- South Korea's acting president moves to reassure allies, calm markets after Yoon impeachment
- Peter Schrager's incredible streak of picking Super Bowl champions lives on with Chiefs win
- Police identify Genesse Moreno as shooter at Joel Osteen's Lakewood Church: What we know
- Lowest and highest scoring Super Bowl games of NFL history, and how the 2024 score compares
Recommendation
The FBI should have done more to collect intelligence before the Capitol riot, watchdog finds
Experts weigh in on the psychology of romantic regret: It sticks with people
Smoking in cars with kids is banned in 11 states, and West Virginia could be next
Give Patrick Mahomes and Brittany Mahomes a Trophy for Their Family Celebration After Super Bowl Win
San Francisco names street for Associated Press photographer who captured the iconic Iwo Jima photo
Been putting off Social Security? 3 signs it's time to apply.
Super Bowl photos: Chiefs, Taylor Swift celebrate NFL title
Older workers find a less tolerant workplace: Why many say age discrimination abounds