Costco reports better-than-expected earnings, revenue
Costco’s new fiscal year is off to a strong start with the company reporting better-than-expected earnings and revenue for its first quarter.
The results come as the membership warehouse club giant is set to undergo a leadership transition. Longtime CEO Craig Jelinek will step down, effective Jan. 1, 2024. He will be suceeded by Ron Vachris, who has served as COO and president since February 2022.
Net income totaled $1.58 billion, or $3.58 per share, for the quarter ended Nov.20, compared to $1.36 billion, $3.07 per share, in the year-ago period. Analysts had expected earnings of $3.41 per share.
This year’s results included a tax benefit of $44 million, $0.10 per diluted share, related to stock-based compensation.
[Read more: Costco offering members discounted outpatient medical care services]
Net sales rose 6.1% to $56.72 billion,up from $53.44 billion. The company said that net sales benefited by approximately one-half to one percent in the U.S. and worldwide from the shift of the fiscal calendar, as a result of the fifty-third week in fiscal year 2023. Total revenue rose to $57.80 billion, beating expectations of $57.71 billion.
Total company comparative sales rose 3.8%. Comp sales rose 2% in the U.S., and 6.4% in Canada. Other international comp sales increased 11.2%. E-commerce comps increased 6.3%.
Membership fees totaled $1.082 billion, up from $1 billion in the year-ago quarter. At the end of the quarter, Costco had 129.5 million cardholders, up 7.1% from last year.
On the company’s earnings call, CFO Richard Galanti was once again questioned by analysts about a potential membership fee hike.
"I'll use my standby answer, my answer, it's a question of when, not if," Galanti. "But at this juncture, we feel pretty good about what we're doing."
[Read more: Craig Jelinek to step down as CEO of Costco]
Costco said that its board has declared a special cash dividend on Costco common stock of $15 per share, payable January 12, 2024, to shareholders of record as of the close of business on Dec. 28, 2023. The aggregate amount of the payment will be approximately $6.7 billion.
Costco currently operates 871 warehouses, including 600 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 33 in Japan, 29 in the United Kingdom, 18 in Korea, 15 in Australia, 14 in Taiwan, five in China, four in Spain, two in France, and one each in Iceland, New Zealand and Sweden. Costco also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
This story originally appeared on Chain Store Age.