Kyle Wool warns prices ‘going up across the markets’ soon
Revere Securities president Kyle Wool warns of price hikes within logistics, transportation and food industries, which will hurt the ‘average American consumer.’
Costco is putting off a potential membership fee increase as its renewal rates hit all-time highs in its fourth quarter.
"In terms of membership fees and a possible increase, there are no specific plans regarding a fee increase at this time," Costco Chief Financial Officer Richard Galanti said during the company's earnings call on Thursday. "We're pleased with our growth in both top line sales and membership households over the last several quarters and in member loyalty as reflected in increasing member renewal rates."
|COST||COSTCO WHOLESALE CORP.||471.05||-16.12||-3.31%|
At the end of the fourth quarter, Costco's membership renewal rate came in at 92.6% in the U.S. and Canada, and 90.4% worldwide, up from 92.3% and 90% in the previous quarter, respectively.
The company has 65.8 million paid household members and 118.9 million cardholders as of the end of the fourth quarter, both up 6.5% compared to a year ago. Paid executive memberships totaled 29.1 million, an increase of 1.2 million compared to the third quarter. Executive members now represent over 44% of Costco's members and just under 72% of its worldwide sales.
SUPPLY CHAIN ISSUES AND INFLATION FUEL BILLION-DOLLAR BLACK MARKET
Historically, Costco has increased its membership fees about every five and a half years. Galanti noted that the last three increases were on average five years and seven months apart. The company, which last raised its membership fees in June 2017, currently charges $120 per year for executive memberships and $60 per year for its Gold Star and business memberships.
"If you look at June of '17, plus five years and seven months, you're talking roughly January '23," Galanti said. "Now I'm not suggesting it's January '23. I'm just saying it's not there yet, anyway. And our view is we are confident in our ability to do so. And at some point, we will, but it's a question of when, not if."
"Given the headline of inflation and concerns about recession, we feel quite comfortable driving sales and earnings the way we are right now, and we still have that arrow in our quiver as we go forward," he added.