Costco Wholesale Corporation continues to set the benchmark for retail excellence, delivering impressive fiscal first-quarter results that exceeded Wall Street’s expectations. The company’s ability to blend value-driven offerings with a superior shopping experience has resonated with its diverse customer base, resulting in strong revenue growth and record-breaking operational achievements.
During the quarter ending November 24, Costco reported net income of $1.80 billion, or $4.04 per share, a notable increase from $1.59 billion, or $3.58 per share, during the same period last year. Revenue climbed to $62.15 billion, comfortably surpassing analyst projections of $62.08 billion and marking a significant rise from $57.80 billion in the previous year. This growth reflects Costco’s ability to adapt to shifting consumer preferences and maintain its reputation for exceptional value.
E-commerce emerged as a standout performer, with sales increasing by 13% year-over-year. CEO Ron Vachris credited this growth to strategic investments in logistics and digital infrastructure, which enabled Costco to handle nearly one million deliveries in the quarter—a new record for the company. Enhanced online engagement, characterized by rising traffic, improved conversion rates, and higher average order values, underscored the success of Costco’s digital transformation efforts.
The retailer’s product offerings captured the evolving needs of consumers navigating an inflationary economy. Fresh food categories, particularly meat and produce, experienced robust growth, reflecting a shift toward home cooking as dining out became less prevalent. CFO Gary Millerchip highlighted a dual trend within Costco’s customer base: some members continued to indulge in high-quality premium cuts of meat, while others gravitated toward budget-friendly options like poultry and lower-cost cuts of beef and pork. This ability to cater to both ends of the consumer spectrum underscores Costco’s versatility.
Costco’s private label brand, Kirkland Signature, further solidified its appeal, growing faster than the overall business. Strategic price reductions on staple items like organic peanut butter and chicken stock reinforced the brand’s commitment to delivering high-quality products at competitive prices. Non-grocery categories also shone brightly, with double-digit growth recorded in home furnishings, jewelry, health and beauty aids, luggage, and sporting goods.
Membership loyalty remained a cornerstone of Costco’s success. The company reported membership fee revenue of $1.17 billion, reflecting an 8% year-over-year increase excluding foreign exchange impacts. Global membership renewal rates stood at 90.4%, showcasing strong retention despite a slight dip linked to newer members joining through digital channels. By the end of the quarter, Costco counted 77.4 million paid household members and 138.8 million cardholders, marking an impressive 8% increase from the prior year.
Operational highlights underscored Costco’s ability to meet and exceed customer expectations. The company’s bakery division set new records, selling 4.2 million pies in the three days leading up to Thanksgiving, while its food courts achieved notable success, with 274,000 pizzas sold on Halloween. Ancillary services, including optical departments and travel offerings, complemented these achievements, highlighting Costco’s diverse appeal.
Expansion plans remain integral to Costco’s growth strategy. The company opened seven new warehouse clubs during the quarter and aims to add 29 more locations during the fiscal year, including ten international sites. This growth reflects Costco’s commitment to strengthening its global footprint while maintaining a dominant presence in the U.S., where it operates 617 of its nearly 900 clubs.
Costco’s strong financial performance translated into exceptional stock market gains. The company’s shares have surged nearly 50% this year, significantly outpacing the broader market’s 27% growth. Closing at $988.39 on Thursday, Costco’s stock performance underscores investor confidence in its ability to navigate challenges and deliver sustainable growth. By prioritizing value, quality, and innovation, Costco continues to redefine the retail experience for millions of loyal members worldwide.
