Costco keeps membership fees at current price, though hike still a 'when, not if'
Costco's last membership fee hike occurred in 2017
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Costco is keeping its membership fees at their current prices, a move that may allow customers to breathe a sigh of relief — for now. The retailer, however, did not rule out a future hike.
"It’s when, not if, still," CFO Richard Galanti said Thursday during the company's second-quarter earnings call, referring to membership fees.
There had been speculation leading up to Thursday about the possibility that a membership fee hike announcement could coincide with Costco’s latest quarterly report, but it did not come to pass.
A general view of a Costco store in Teterboro, New Jersey, on June 28, 2023. (Kena Betancur/VIEWpress / Getty Images)
Galanti told analysts and investors that renewal rates, new member sign-ups and loyalty "are continuing in the right direction." These are some of the factors that the company looks at when deciding on membership fees.
SOME OF COSTCO'S BEST TIDBITS FROM VOICE OF THE RETAILER
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| COST | COSTCO WHOLESALE CORP. | 971.88 | +10.33 | +1.07% |
The company reported its total cardholders increased to 132 million as of the end of the second quarter, a 7.3% increase over the same period a year ago.
Costco said it is keeping its membership fees at their current rates — for now. (Dominic Bracco II for The Washington Post via Getty Images / Getty Images)
"It really is a function, and I don’t think it would be done simply because, hey, things have slowed down a bit, let’s do it now," Galanti added. "We like the fact that we’re performing well. We like the fact that almost all metrics are going in the right direction in our business right now. We’ve got plenty of runway left."
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He said Costco "will at some point, I’m sure, do it," and joked it will "be on [Gary Millerchip’s] watch, not mine." Former Kroger CFO Gary Millerchip is expected to succeed Galanti when he retires after nearly 40 years next week.
Shoppers wait in a check-out line at a Costco store in Orlando, Florida. (Paul Hennessy/SOPA Images/LightRocket via Getty Images / Getty Images)
The price of Costco memberships last increased in 2017. In the past, the hikes have typically occurred in roughly 5.5-year intervals, Galanti has previously said.
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In the second quarter, the retailer brought in $1.1 billion from membership fees, an increase of more than 8% from the nearly $1.03 billion it notched in the same quarter a year earlier.
Costco Wholesale Corp.
Costco reported $58.44 billion in second-quarter revenue, below analysts' estimates of $59.16 billion.