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Costco raises membership fees, misses earnings forecasts

Fee increases will affect around 35 million members across Canada and the U.S.
3/3/2017

Costco Wholesale announced Thursday it's raising its membership fees, as the warehouse club operator released quarterly results that fell short of Wall Street's expectations. Its shares fell more than 4% in after-hours trading.

Starting June 1, annual membership fees for individual, business and business add-on members in the U.S. and Canada will rise $5 to $60. Executive memberships in the U.S. and Canada will increase from $110 to $120. Overall, the fee increases will affect around 35 million members.

The Issaquah, Washington-based company reported fiscal second-quarter net income of $515 million, or $1.17 per share. The average estimate of 13 analysts surveyed by Zacks Investment Research had been for earnings of $1.35 per share.

Costco posted revenue of $29.77 billion in the period, which also did not meet Street forecasts. Seven analysts surveyed by Zacks expected $29.99 billion.

Its stock was off $7.30 to $170.68 in after-market trading following the release of the earnings report.

Through the close of Thursday's regular trading session, its shares have climbed 11% since the beginning of the year, while the Standard & Poor's 500 index has increased more than 6%.

 

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