Costco’s Fiscal Fourth Quarter Beats Expectations

The big box retail store plans to hold off on raising cardmember fees.

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Costco reported on Thursday that its fiscal fourth-quarter earnings surpassed the expectations of analysts. The wholesale big-box retail store usually raises its membership fees about every five years or so, but since the company did so well during the last fiscal quarter, it’s keeping fees right where they are and holding off on raising membership prices for its members.

In August, Sam’s Club, a Costco competitor, raised its membership fees. But, Costco CFO Richard Galanti said his company hasn’t reached the point for an increase.

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

Costco memberships typically cost $60 annually, or $120 per year for executive memberships and added perks.

For the quarter ending August 28, Costco said that executive members comprise 44 percent of its total membership, adding that its member count had also increased. The company reported that as of May 8, 2022, it had 116.6 million cardholder members.

For its fourth fiscal quarter, the Issaquah, Washington-based company reported $72.09 billion in revenue compared to the $72.04 predicted by analysts. Its earnings per share also saw an increase from last year during the same period, reaching $4.20 per share compared to analyst estimates of $4.17.

But, Costco reported that increased costs due to inflation impacted its gross profit margins for the period.

Despite the higher costs, Costco has managed to maintain some of the prices on its most popular products. Galanti said that Costco’s private label brand, Kirkland, is still seeing strong demand.

On Friday, 3:41 p.m. EDT, Costco stock prices stood at 466.77 per share, a 4.19 percent decline from Thursday’s closing prices.

As of August 25, 2022, Costco had 838 warehouses worldwide employing 298,000 workers. The company has a market cap of $206.64 billion.


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