Costco, founded in Seattle in 1976, is one of the oldest and most famous membership-based warehouse retailers. As inflation pressures ease and consumers resume spending on non-essential items, Costco continues to demonstrate strong growth in the latest quarter.
Financial data shows that Costco's third-quarter revenue reached $58.52 billion, exceeding market expectations of $57.98 billion; adjusted earnings per share were $3.78, higher than the expected $3.70.
In the current environment where consumers pursue value for money, Costco's same-store sales grew by 6.5% year-on-year, with double-digit growth in its international business, Canadian market, and U.S. domestic market at 8.5%, 7.4%, and 6% respectively. Data shows that Costco saw an increase in foot traffic compared to the same period last year, leading the way among its peers.
Currently, Costco's business footprint has expanded to 876 warehouse-style stores, with over 600 stores in the U.S. and the rest located in Canada, Mexico, Japan, the UK, and other places.
Chief Financial Officer Gary Millerchip stated that with inflation cooling down, consumer spending in non-essential categories such as toys, tires, gardening, and beauty care is recovering.
New CEO Ron Vachris emphasized that the company's competitiveness in essential categories like food and dining is evident, which helps attract more customers during times of high inflation. He mentioned that unlike competitors like Target and Walmart, Costco currently does not need to adopt comprehensive price reduction strategies as the company has already done the pricing work.
However, some products under the company's Kirkland Signature brand, such as pine nuts and frozen shrimp skewers, did see price reductions.
In addition to strong performance in physical stores, Costco's e-commerce business grew by 20.7% year-on-year, mainly driven by the online sales growth of popular categories like jewelry, gift cards, and appliances. New mobile app downloads surged by 32% to 35 million times. Furthermore, the company's partnership with Uber Grocery in the U.S. and Canada continues to deepen.
Logistics and delivery services are also highlights, with delivery volumes increasing by 28% compared to the previous quarter, covering various categories such as TVs, computers, appliances, tires, and mattresses, directly competing with retailers like Best Buy.
To ensure long-term development and attract more young customers, Costco is also trying to sell some warehouse inventory directly online, but Vachris stated that the company will continue to uphold and improve the in-store shopping experience.
In addition to product sales, membership services are also an important source of profit for Costco. Membership fee revenue reached $1.12 billion in the last quarter, a 7.6% year-on-year increase, in line with expectations. The annual fee for regular Gold members is $60, while Executive members need to pay $120. Some analysts predict that Costco may increase membership fees this summer, but executives are currently tight-lipped about it
In the third quarter, the company had a total of 74.5 million paid members, with 34.5 million being premium members.
Looking ahead, the development of the advertising business is seen as another potential growth opportunity for Costco. In comparison with industry peers, leveraging the vast population data resources of its membership base, industry giant Walmart's U.S. media business Walmart Connect recorded a 26% revenue growth in the most recent quarter.
Year-to-date, Costco's stock price has risen by over 25%, significantly outperforming the S&amp;P 500 index (10%).
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COST

In the current environment where consumers pursue value for money, Costco Wholesale saw a 6.5% year-on-year growth in same-store sales in the first quarter of this year

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Costco Wholesale

Low prices are always advantageous! Costco's financial report exceeded expectations again, with its stock price hitting a historical high, far outperforming the S&P