Costco wraps fiscal year with steady Q4
Costco Wholesale Corp. wrapped up its fiscal year with a mostly stable fourth quarter, as adjusted sales comps in the United States rose 6.3% and overall revenue came in a bit below analysts’ projections at $79.69 billion. The performance reflected ongoing market conditions, both domestically and internationally, as shoppers remain resilient but wary and the company continues to invest in higher wages.
Adjusted comps for Canada were up 7.9% for the quarter and 8.1% for the year.
E-commerce was a bright spot for the club operator, with sales comps in this channel leaping 19.4% during Q4. Membership sales were up a bit, reaching $1.51 billion compared to $1.50 billion in Q4 of 2023. Costco ended the quarter with 76.2 million paid household members, a 7.3% year-over-year (YoY) gain.
Those membership figures will be closely watched for Q1 of fiscal 2025, after Costco raised its annual membership fee by $5 on Sept. 1. In the Sept. 26 earnings call, CFO Gary Millership said the hike doesn’t seem to have had a major impact. “We haven't seen a significant member reaction. Membership renewal rates remain stable. Our efforts to stave off inflation and deliver value to members have been recognized, and we continue to invest in member experience,” he said.
Another recent change, the addition of membership card readers at the front doors, hasn’t caused too much of a stir, either. “The membership card scanners installed at the front doors have delivered on the goal of speeding up the checkout process. This has been very well received by our members. More improvements are currently underway, which should further benefit our business, both online and in our warehouses,” shared President and CEO Ron Vachris during the earnings call.
Meanwhile, for the full fiscal year, U.S. sales comps rose 5% on an adjusted basis and total global comps climbed 5.9%. E-comm sales were up 16.2% for FY2024.
Location analytics data Placer.ai confirms that it was a respectable year for Costco. In a new report, "Costco in 2024: A Deep Dive," Placer.ai reveals that visits to Costco stores rose 10.6% YoY in August, 7.6% in July and 10.5% in June. “Costco’s visitation patterns showcase a brand that is positively thriving in 2024. And though it may be too soon to assess the impact of the membership chain’s recent fee hike, the warehouse chain appears poised to enjoy a robust November and December holiday season,” analysts observed.
Turning the page on 2024, Millerchip noted that Costco members continue to gravitate towards groceries, even as slowing inflation is spurring a return to nonfood items. “There's a shift from food away from home to food at home, with strong growth in fresh foods and ethnic food categories,” he reported.
While members stock up on groceries, demand for the gold bars that Costco sells on its website remains hot. Millerchip noted that gold bar sales rose double digits during Q4 and helped lift the overall e-comm numbers.
Headed into fiscal 2025, the company continues to build on its success–literally. In light of its growing digital and physical store business, Costco opened 30 new warehouses this year. The company now runs 891 such sites.
This article was first published on sister site Progressive Grocer
