Costco Quarterly Revenues Exceed $50 Billion, Membership Revenues Approach $1 Billion

Scott Peters
26 May, 2022
New York City

Costco Wholesale Corporation quarterly sales jumped as more consumers signed up looking for cheaper gasoline and consumables. 

The membership warehouse club reported fiscal third quarter sales ending on May 8 increased 16.3% to $51.61 billion and net income jumped 10% to $1.353 billion. 

Diluted earnings per share in the quarter increased to $3.04 from $2.75 a year ago. 

Higher food prices and gasoline prices lifted new member sign up and drove membership revenues higher 9% to $984 million. 

Gross margin in the quarter fell to 10.3% from 11.1% in the previous year's quarter. 

Net income margin fell to 2.47% from 2.7% a year ago. 

Comparable sales in the U.S. rose 16.6%, in Canada gained 15.2%, and at other international locations increased 5.7%. 

Across the company comparable sales rose 14.9%. 

Comparable sales excluding fuel and adjusting for foreign exchange in the U.S. rose 10.7%, in Canada gained 12.8%, and other international locations jumped 9.1%. 

Across the company comparable sales excluding fuel and adjusted for foreign exchange increased 10.8%. 

E-commerce sales jumped 7.4% and excluding fuel and foreign exchange advanced 7.9%.

Battered by high food and fuel prices consumers have been looking for cheaper alternatives and restricting purchases to basic items. 

 In the fiscal second quarter ending on Feb 13, the retailer reported comparable U.S. same store sales excluding gasoline increased 15.8% from a year ago and slowed to 12.7% in March, and dropped further to 8.1% in April.  

Last week competitors BJ's Wholesale Club and Sam's Club owned by Walmart reported strong sales gains and a surge in membership. 

Sam's Club, the discount membership warehouse, said  sales increased 17.5% to $19.6 billion and comparable sales increased 10.2% from a year ago and jumped 17.4% on a two-year basis. 

Gross margin declined to 2.2% due to higher discounting caused by inventory delays and higher supply chain costs.  

Sam's Club membership revenues increased 10.5% and number of transactions increased 102%. 

Comparable sales growth picked up to 10.2% from 7.2% in the quarter a year ago.

A week ago, BJ's Wholesale Club reported April quarter sales increased 16.2% to $4.5 billion and net income rose 38% to $112.5 million or 87 cents a share. 

Net income margin n the quarter was 2.45%. 

The company said comparable store sales surged 14.4%  and excluding gasoline rose 4.1% from  a year ago.  

Guidance and Outlook 

The company did not provide any formal guidance for revenues, earnings, or other business metrics. 

Company and Stock 

Costco currently operates 830 warehouses, including 574 in the United States and Puerto Rico, 105 in Canada, 40 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland.

Costco stock in regular trading hours closed up 5.6% to $464.99 before the release of earnings. 

In the after-hours trading Costco declined 2% to $455.78. 

In the year-so-far, Costco stock has fallen 18%.