Costco maintains membership fees after earnings exceeded expectations

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Shoppers wait in line at the checkout counter at a Costco wholesaler in Orlando, Florida.

Paul Hennessy | Sopa images | Light rocket | Getty Images

Costco is still waiting to increase its membership fees after reporting fiscal fourth quarter results that exceeded expectations.

The retailer typically raises rates every five years, but has not said when it will do so again after rival Sam’s Club increased its fee in late August. On Thursday, Costco Chief Financial Officer Richard Galanti noted that the company has yet to reach its typical upside milestone.

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

A Costco membership costs $60 per year, or $120 per year for an executive membership with added benefits.

During the quarter ended Aug. 28, Costco said membership has increased and the proportion of executive members now represents a record 44% of members.

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For the quarter, Costco reported higher revenue of $72.09 billion, slightly above the $72.04 analysts had expected. Earnings per share rose to $4.20 from a year ago, beating estimates of $4.17.

Gross margins declined in the quarter as inflation pushed up costs.

Shares of Costco fell 2% in Friday morning trading.

Costco has kept its prices competitive, even maintaining the price of its $1.50 hot dog combo meal as inflation puts pressure on shoppers. Galanti noted a small increase for the company’s own Kirkland-branded products, but said the company sees a relatively strong consumer.

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“They don’t trade down. They trade up or certainly the same,” Galanti said in Thursday’s earnings call.

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