Current:Home > StocksCostco membership growth 'robust,' even amid fee increase: What to know about earnings release -Elevate Capital Network
Costco membership growth 'robust,' even amid fee increase: What to know about earnings release
View
Date:2025-04-14 15:28:56
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! (4111)
Related
- Audit: California risked millions in homelessness funds due to poor anti-fraud protections
- Cities are shoring up electrical grid by making 'green' moves
- Halsey reveals illness, announces new album and shares new song ‘The End’
- UN migration and refugee agencies cite ‘fundamental’ right to asylum after US moves to restrict it
- The Daily Money: Spending more on holiday travel?
- School boards group backs out of teacher exchange program amid ex-North Dakota lawmaker’s charges
- Travis Kelce Is Guilty as Sin of Letting Taylor Swift Watch This TV Show Alone
- Dollar General digital coupons: Get promo codes from USA TODAY's coupons page to save money
- 'Most Whopper
- Online lottery player in Illinois wins $560 million Mega Millions jackpot
Ranking
- Jury finds man guilty of sending 17-year-old son to rob and kill rapper PnB Rock
- What will become of The Epoch Times with its chief financial officer accused of money laundering?
- Jennifer Lopez shares message about 'negativity' amid tour cancellation
- Gypsy Rose Blanchard's Ex Ryan Anderson Reacts to Her Reuniting With Ken Urker
- Audit: California risked millions in homelessness funds due to poor anti-fraud protections
- Pat Sajak set for final 'Wheel of Fortune' episode after more than four decades: 'An odd road'
- The Daily Money: X-rated content comes to X
- New Trader Joe's mini-cooler bag is burning up resale sites, but patience could pay off
Recommendation
Most popular books of the week: See what topped USA TODAY's bestselling books list
Pro athletes understand gambling on their games is a non-negotiable no-no. Some learned the hard way
Prosecutors want Donald Trump to remain under a gag order at least until he’s sentenced July 11
Celebrating Pride Month? You Need These Fun Accessories to Level up Your Pride Outfit
British swimmer Adam Peaty: There are worms in the food at Paris Olympic Village
14-years old and graduated from college: Meet Keniah, the Florida teen with big plans
Baby Reindeer Star Jessica Gunning Comes Out as Gay
Celebrating Pride Month? You Need These Fun Accessories to Level up Your Pride Outfit