Current:Home > NewsCostco membership growth 'robust,' even amid fee increase: What to know about earnings release -MoneyBase
Costco membership growth 'robust,' even amid fee increase: What to know about earnings release
View
Date:2025-04-13 06:44:07
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! (971)
Related
- California DMV apologizes for license plate that some say mocks Oct. 7 attack on Israel
- Suspected tornadoes kill at least 3 in Ohio, leave trail of destruction in Indiana, Kentucky
- Millions blocked from porn sites as free speech, child safety debate rages across US
- Save Up to 60% Off on Barefoot Dreams Loungewear & Experience Cozy Like Never Before
- Residents worried after ceiling cracks appear following reroofing works at Jalan Tenaga HDB blocks
- 'The American Society of Magical Negroes' is funny, but who is this satire for?
- Woman accuses Dak Prescott of sexual assault after Cowboys QB sues her on extortion claim
- James Crumbley, father of Oxford High School shooter, found guilty of involuntary manslaughter
- This was the average Social Security benefit in 2004, and here's what it is now
- Jax Taylor Addresses Cheating Rumors and Reveals the Real Reason for Brittany Cartwright Breakup
Ranking
- See you latte: Starbucks plans to cut 30% of its menu
- Drew Barrymore, those menopause supplements she's raving about and what experts want you to know
- 50 killed in anti-sorcery rituals after being forced to drink mysterious liquid, Angola officials say
- A judge tosses claims against a former Wisconsin police officer who killed 3 people in five years
- Person accused of accosting Rep. Nancy Mace at Capitol pleads not guilty to assault charge
- Suspected tornadoes kill at least 3 in Ohio, leave trail of destruction in Indiana, Kentucky
- See Exes Phaedra Parks and Apollo Nida Reunite in Married to Medicine Reunion Preview
- 'Absolutely wackadoodle': Mom wins $1.4 million after using kids' birthdates as lottery numbers
Recommendation
Senate begins final push to expand Social Security benefits for millions of people
White Sox finally found the 'right time' for Dylan Cease trade, leaving Yankees hanging
Savannah Chrisley Shares Why Parents Todd and Julie Chrisley Still Haven't Spoken Since Entering Prison
Kelly Clarkson shocks Jimmy Fallon with 'filthy' Pictionary drawing: 'Badminton!'
Chuck Scarborough signs off: Hoda Kotb, Al Roker tribute legendary New York anchor
Russell Wilson Is the MVP After Helping Ciara With Her Breastmilk
Kylie Kelce Mourns Death of Her and Jason Kelce’s Beloved Dog Winnie
Inside Bachelor Alum Hannah Ann Sluss’ Bridal Shower Before Wedding to NFL’s Jake Funk