Costco’s stock fell -$15.97 per share on Friday morning following Costco’s fiscal Q2 2023* earnings release on Thursday evening. Despite continued slowing YoY growth (driven by weakness in GM sales & eComm). Costco continues to grow sales in the U.S. and internationally, topline, new memberships, and renewals. Costco’s margins remain compressed as they invest in price, right-size inventory and look to increase promotion depth and reach.
The retailer has held off once again on raising member fees as members remain pressured by inflation and households continue to grow (the last increase was in 2017). Commodity prices have begun to drop, which will likely lead to tougher price negotiations for suppliers (estimated 5% inflation). Overall, Costco’s strategies and value proposition continue to prove effective with members of all incomes and set them up for success in the face of uncertainty over the next year.
*Note: Costco’s fiscal year runs from September to August, making their fiscal Q2 (12 weeks from December to February), comparable to other retailers’ Q4 results.
Download Harvest Group’s full Q4 2022 Costco earnings recap with takeaways for suppliers here:
