Costco Q4 tops Street, to open 35 new warehouses; holiday mix to look ‘different’
Costco Wholesale Corp. reported another solid quarter amid strong e-commerce sales, and as it continues to attract new members.
The retailer’s membership fee income rose 14% to $1.72 billion during the quarter. In September 2024, Costco raised its annual membership fee — the first hike since 2017 — by $5. On the earnings call, CFO Gary Millerchip said that the increase accounted for a little less than half of its membership fee income growth in the quarter.
During the summer Costco gave its premium “Executive” members extra hours to shop in its stores in the morning and on Saturdays. CEO Ron Vachris said during the call that the extra hours had added about 1% to weekly U.S. sales and been “very well received” by members.
Costco opened 27 new warehouses, including three relocations, during its recently completed fiscal year. The company plans to open another 35 warehouses in its new fiscal year, including five relocations, Vachris told analysts.
“We continue to see significant opportunities for expansion both domestically and internationally across the markets where we currently operate,” he told analysts.
"Costco's holiday product mix this year will look “a little different from years past,” Millerchip said during the call. In booking for the holiday season, Vachris explained, Costco buyers “really had to evaluate all the discretionary items, the toys and the trim and the decorations and those kind of things” and make decisions based on the necessities. Seasonal selections such as decorations, toys and Christmas trees will be slimmed down this year, Vachris told analysts.
Costco’s net income rose to $2.61 billion, or $5.87 per share, for the quarter ended Aug. 31, compared with $2.35 billion, or $5.29 per share in the year-ago period. Analysts had expected earnings per share of $5.80.
Net sales increased 8% to $84.4 billion. Total revenue, including membership sales, was $86.15 billion, up from $79.69 billion and topping analysts expectations of $86.01 billion.
Excluding impacts from changes in gas prices and foreign exchange, Costco’s total comparable sales rose 6.4%. Comp sales rose 6% in the U.S., and 8.3% in Canada. Other international comps increased 7.2%. E-commerce sales rose 13.5%.
Traffic to stores and Costco’s website rose 3.7% worldwide during the quarter, and the average transaction or ticket increased 2.6% (excluding impacts from changes in gas prices and foreign currency).
For the full year, Costco’s net sales increased 8.1% to $269.9 billion. Total revenue rose to $275.23 billion from $254.45 billion, Net income was $8.099 billion, or $18.21 per share, compared to $7.367 billion, or $16.56 per share, last year.
Costco currently operates 914 warehouses, including 629 in the United States and Puerto Rico, 110 in Canada, 42 in Mexico, 37 in Japan, 29 in the United Kingdom, 20 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, two in Sweden, and one each in Iceland, and New Zealand. Costco also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
