Costco Reports Strong Q4 Results with Membership Renewal Improvements
Costco Wholesale reported better-than-expected fourth-quarter results for the August quarter, with total revenue rising to $95.72 billion and adjusted earnings per share increasing by 15% year over year. Despite these gains, concerns remain about membership growth trends as renewal rates continue to be a key focus area. Membership fee income grew slightly below estimates but showed sequential improvement in both worldwide and U.S./Canada renewal rates. The company's stock saw minimal movement after hours despite the positive results, with shares down 18% from their May high compared to Walmart’s nearly 20% decline over the same period. Analysts remain cautious due to Costco's premium valuation but have reiterated a hold-equivalent rating while lowering the price target to $1,050. Executive membership growth reached an all-time high with 42.3 million members and showed higher renewal rates than basic memberships. However, overall paid membership growth slowed further in Q4 at 3.8% year over year.
Topics: earnings membership trends revenue growth stock performance