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As inflation continues to weigh on consumer prices, not all retailers are feeling the effects of changing consumer behavior.
Costco offers unique products, from outdoor swings to premium meats, and standard inventory keeps prices low. Publication Revenue The company on Thursday reported impressive third-quarter fiscal 2024 revenue of $57.39 billion, up 9.1% from the prior year.
“Right now, what we’re seeing from our members is a very healthy environment,” Costco CEO and president Ron Bakris said. During a conference call with investors.
Vachis noted that new products such as Wagyu beef, $1,200 swings and the infamous gold bars have been well received by customers, boosting revenue.
“We’re not there yet. We keep selling out,” he said of the swing sets, “but again, the constant innovation of our product is what excites our members and really drives sales. People are engaging at a much higher level than they used to.”
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According to a report last month, Costco’s October 2023 launch of one-ounce 24-karat gold bars is bringing in an estimated $100 million to $200 million in profits for the warehouse chain each month. It’s another product innovation that brings members to the chain, and the hot item sells out almost every time it’s restocked.
Membership revenue was also a growth area for Costco in the third quarter, with total revenue of $1.123 billion, up $79 million, or 7.6%, from the same period last year.
Costco EVP and CFO Gary Millerchip noted that while the chain has historically sought to raise membership fees every five years (it last did so seven years ago), it’s in no rush to do so and shouldn’t have any issues with membership renewals or enrollment.
“We feel very good about our renewal rates,” Millerchip said on the conference call. “Given what’s happened in the market over the last few years, the risks and concerns of high inflation and recession, we’re still evaluating it to see if it’s the right time. When we feel like it’s the right time, we’ll of course communicate that very openly and directly.”
And for those worried about inflation hitting Costco’s popular $1.50 hot dog and soda combo, there’s no need to worry.
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“To dispel some recent media speculation, I also want to confirm that the $1.50 price point for a hot dog is safe,” Millerchip said cheekily.
Costco It was up As of Friday afternoon, it was 58% up from last year.