Costco Wholesale announced its fourth quarter and fiscal year 2025 earnings results Thursday, touting its new global locations, digital upgrades and the impact of its expanded hours for executive members.
The retailer launched exclusive morning hours for executive members in June, along with an additional Saturday evening hour for all US members.
The changes were designed to “increase value and convenience,” Costco President and CEO Ron Vachris said on the earnings call.
“We estimate these incremental hours have added about 1% to weekly US sales since implementation,” Vachris said, noting that executive members also receive a $10 monthly credit on Instacart purchases over $150. “This has been very well received by our members.”
The new perks have helped drive a “meaningful increase in upgrades” from gold-star members to executive memberships, he added.
In the fourth quarter, Costco opened 10 new warehouses, including a relocation in Canada, its 24th warehouse in Korea, its second warehouse in Sweden and five in the US.
For the fiscal year, the retailer added 27 new warehouses — 24 net new locations — bringing its global footprint to a total of 914 warehouses, according to Vachris.
“We plan to open another 35 warehouses in fiscal year [2026], of which five are relocations,” Vachris said. “We continue to see significant opportunities for expansion, both domestically and internationally, across the markets where we currently operate.”
The company now has 81 million paid members, up 6.3% from last year. Renewal rates were 92.3% in the US and Canada and 89.8% worldwide, Gary Millerchip, executive vice president and chief financial officer, said on the earnings call.
“The decline in renewal rates was largely attributable to a higher number of online sign-ups entering the renewal rate, and this quarter included a large Groupon campaign in December 2023 entering the calculation,” Millerchip said.
Quarterly net sales rose 8% to $84.4 billion, up from $78.2 billion a year ago. For the fiscal year, net sales climbed 8.1% to $269.9 billion, compared with $249.6 billion last year.
The retailer also recently celebrated a few milestones, including the 40th anniversary of its $1.50 hot dog and soda combo, as well as replacing Pepsi products with Coca-Cola in its food court, Vachris said.
“Reflecting on fiscal year 2025 overall, our merchandising and operations team did a fantastic job delivering strong financial results while also investing in our employees and improving value and convenience for our members,” Vachis said.
“Our merchants adjusted their plans to mitigate tariff impacts and source items that our members need, while delivering the lowest price at the best value offers quickly and efficiently adapted to pay raises.”
Credit: Source link
