Costco Earnings Are Today. A Membership Fee Increase Is in Focus.

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The wholesale club hasn't increased its membership charges since 2017. Many on Wall Street think a boost is overdue.

Costco Wholesale’s next quarterly results might not be enough to move the stock, but news about a potential increase in membership fees would do the trick, analysts say.

Because the company provides monthly sales updates, and has already reported numbers for 52 of the 53 weeks in its 2022-2023 fiscal year, the chances of a major surprise in terms of revenue are slim, wrote AB Bernstein analyst Dean Rosenblum in a note to clients. Comparable-store sales have also been in a bit of a slump, decelerating steadily over the course of the past four quarters in what Evercore ISI analyst Greg Melich called “a year of the lowest comps since 2017.” Comparable-store sales rose by 14.9% in the quarter ending May 2022 but by that month this year, the gain was only 3.5%. They are expected to rise by the same amount this quarter, according to FactSet.

Analysts point out that Costco has historically raised fees about once every five or six years. The latest increase was in 2017, but the company has held off on increasing rates to avoid alienating customers who have been struggling with higher costs for groceries. Costco currently charges $60 for a basic membership and $120 for an executive membership.

 

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