Costco Wholesale wrapped up its fiscal year with another strong quarter, boosted by membership growth and rising e-commerce sales.
Net income climbed to $2.61 billion, or $5.87 per share, for the quarter ended Aug. 31, compared to $2.35 billion, or $5.29 per share, a year earlier.
Analysts had forecast earnings of $5.80 per share. Revenue rose to $86.15 billion, ahead of Wall Street’s $86.01 billion estimate, with net sales up 8% to $84.4 billion.
Comparable sales grew 6.4% excluding fuel and currency effects, including a 6% increase in the U.S., 8.3% in Canada, and 7.2% across other international markets. E-commerce jumped 13.5%.
Membership fees generated $1.72 billion in the quarter, a 14% increase. CFO Gary Millerchip noted that last year’s $5 annual membership fee hike accounted for less than half of that growth.
CEO Ron Vachris also said the company’s decision to open earlier hours for Executive members this summer was “very well received,” adding roughly 1% to weekly US sales.
Costco opened 27 new warehouses in the last fiscal year, including three relocations, and plans another 35 openings in the new year, with five relocations among them.
“We continue to see significant opportunities for expansion both domestically and internationally across the markets where we currently operate,” Vachris told analysts.
The company is also taking a more measured approach to discretionary holiday merchandise. Buyers “really had to evaluate all the discretionary items, the toys and the trim and the decorations and those kind of things,” Vachris said, noting that seasonal offerings like toys, décor, and Christmas trees will be more limited this year. Millerchip added the holiday mix would look “a little different from years past.”
Traffic across Costco’s stores and websites rose 3.7% worldwide in the quarter, while average transaction size increased 2.6% excluding gas and foreign exchange.
For the full fiscal year, net income rose to $8.1 billion, or $18.21 per share, compared with $7.37 billion, or $16.56 per share, the year before. Annual revenue reached $275.23 billion, up from $254.45 billion.
The retailer ended the year with 914 warehouses worldwide, including 629 in the US and Puerto Rico, 110 in Canada, 42 in Mexico, 37 in Japan, and other locations across Europe, Asia, and Oceania. Costco also operates dedicated e-commerce sites in eight countries.
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