Costco CFO Says Membership Prices Won't Increase—For Now

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For more than a year, Costco has been giving customers hints that membership fees will go up. But customers will have to keep waiting for word on when those fees will go up.

Costco's most recent quarterly earnings call was on December 14. During the call, an investor asked CFO Richard Galanti if the company planned to raise membership fees. He said that there wouldn't be a price increase right now, but shoppers shouldn't think that it would stay that way forever.

Investors and members alike have been guessing for a year now when Galanti will give the exact same answer about when the warehouse club's fees will go up again. Costco has always been overdue for an increase in membership fees.

 In the past, the business has raised its prices about every five years and seven months. The most recent time these fees went up was in June 2017, when Costco raised the price of its Gold Star Membership from $55 to $60 and the price of its Executive Membership from $110 to $120. 

During this week's earnings call, Galanti said that Costco has been waiting longer than usual for a fee increase, but they added that they "haven't needed to do it" yet. 

"We like giving you a lot for your money." "Yes, we've raised the rate a little longer than usual, but we think we've given the membership more value."

Since Costco had a good quarter last time, it makes sense that the company is not in a hurry to raise prices. Costco had better sales and profits than expected for the third quarter. Same-store sales in the US rose by an adjusted 2.6%.

Galanti also said that the number of new members, renewals, and loyal members has all been "strong." Costco had 72 million paid household members at the end of the last quarter, which is 7.6% more than it did a year ago.

It also made 8.2% more money from membership fees than it did last year, bringing the total to $1.082 billion.


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