Costco Won’t Raise Membership Fees After Earnings Exceeded Expectations


Shoppers wait in line at the checkout counter at a Costco wholesaler in Orlando, Florida.

Paul Hennessy | Sopa images | Light rocket | Getty Images

Costco is still waiting to increase its membership fees after reporting fourth quarter fiscal results that beat expectations.

The retailer typically raises rates every five years, but has not said when it will do so again after rival Sam’s Club raised its rates in late August. Richard Galanti, the company’s chief financial officer, noted on Thursday that Costco has not reached its typical upside milestone.

See also  Maharashtra Cancels Johnson & Johnson's Baby Powder Production License

“If you look at June ’17, plus five years and seven months, you have about January ’23,” Galanti said during an earnings call with investors. “Now I’m not suggesting it’s January 23. I’m just saying it’s not there yet.”

A Costco membership costs $60 per year, or $120 per year for an executive membership with added benefits.

During the quarter ended Aug. 28, Costco said membership has grown and executive members now represent a record 44% of total membership.

See also  'The Woman King' ready for big box office after surprisingly strong opening weekend

For the quarter, Costco reported higher revenue of $72.09 billion, slightly above the $72.04 analysts had expected. Earnings per share rose to $4.20 from a year ago, beating estimates of $4.17.

Gross margins declined in the quarter as inflation pushed up costs.

Shares of Costco fell 2% in Friday morning trading.

Costco has kept its prices competitive, even maintaining the price of its $1.50 hot dog combo meal as inflation puts pressure on shoppers. Galanti noted a small increase for the company’s Kirkland-branded products, but said the company sees a relatively strong consumer.

See also  Rupee gains big as dollar on track for longest losing streak in a year

“They don’t trade down. They trade up or certainly the same,” Galanti said in the earnings call.



Please enter your comment!
Please enter your name here