By Sabela Ojea
Costco Wholesale is raising its membership fees for the first time since 2017, less than four months after Gary Millerchip took over as its finance chief.
The wholesale retailer on Wednesday said annual fees would now cost $65, up from $60 previously, for U.S. and Canada Gold Star, business and business add-on members.
The company is also increasing the price of its executive membership plan to $130 from $120. The reward cap will rise to $1,250 from $1,000.
The company, which operates 882 warehouses, said the changes will be effective on Sept. 1 and affect about 52 million memberships, a little over a half of which are executive.
Costco had in the past increased prices every five years or so. The most recent price increases affected 35 million members.
Millerchip told the Wall Street Journal in June that changes could be on the horizon. "We believe there's a lot more opportunity to grow digital," Millerchip said. "I have experience in those areas and would hope that I can bring some of that to help us continue to evolve, but very much in the Costco way."
Any further shifts will be measured, Millerchip said in June, as he doesn't want to overwhelm shoppers with too many choices. "If we're offering the service, it's going to be curated" and in keeping with the quality and value that Costco shoppers look for, he said.
Costco had been telegraphing a membership increase for months. In September, then Chief Financial Officer Richard Galanti said it's "a question of when, not if," on the company's earnings conference call.
Total revenue, including membership fees, rose 9%, to $58.5 billion, for the three-month period ended May 12 compared with a year earlier. Net income for the quarter increased to $1.68 billion from $1.3 billion.
Costco shares rose 2.5% to $906 in after-hours trading and are up about 34% this year.
Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix
(END) Dow Jones Newswires
07-10-24 1858ET
