Costco Wholesale Corp. reported ecommerce sales grew year over year in its fiscal second quarter and first half of the year ended Feb. 18, 2024. The wholesale store’s Q2 began after Black Friday and before Cyber Monday.

Costco net sales increased in both its second quarter and first half. Net income and membership revenue also increased year over year for both periods.

Customers’ shopping frequency grew 5.3% worldwide and 4.3% in the U.S., chief financial officer Richard Galanti said in an earnings call with investors. Year over year, Costco average order value increased 0.3% worldwide and 0.1% in the U.S. in Q2. Galanti said Costco expects to open 30 stores in 2024, two of which will be relocations. In Q3 and Q4, Costco plans to open 15 new locations — 11 in the U.S., two in Japan, and one each in China and South Korea.

Costco announced in February that Galanti is retiring as CFO on March 15. Galanti said he will also retire from Costco’s board of directors in January 2025. Gary Millerchip will take over as CFO. Millerchip was most recently senior vice president and CFO at The Kroger Co. since April 2019, where he worked for a total of 15 years.

Costco is No. 6 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Digital Commerce 360 categorizes it as a mass merchant, a group that also includes Amazon.com Inc., Walmart Inc. and Target Corp.

Costco ecommerce sales in Q2

In Q2, Costco ecommerce sales increased 18.4% year over year. That’s more than three times the company’s total growth rate for the quarter (5.6%). Costco net sales increased to $57.33 billion in Q2, from $54.24 billion in the prior-year period. Costco did not tie a dollar amount to its ecommerce sales growth.

Gold and silver fueled Costco ecommerce sales in Q2, Galanti said. He added that online sales of appliances did well for Costco, too. Costco Logistics — or the retailer’s delivery and installation services — facilitated more than 1 million deliveries in Q2. That’s 28% year-over-year growth.

Costco app downloads grew 2.8 million in the quarter to total about 33 million, Galanti said. Instacart orders represent about 1.5% of total U.S. Costco sales, Galanti said.

Meanwhile, Costco ecommerce sales grew 12.2% in its fiscal first half. That’s more than double the company’s total sales growth (4.7%). Costco net sales grew to $114.05 billion from $107.68 in the previous first half.

Costco ecommerce sales in February

For the four-week period ended March 3, Costco ecommerce sales grew 16.2% year over year. That’s more than triple the total sales growth in February 2023 (5%). Costco net sales grew to $18.21 billion. That’s up 6.9% from $17.05 billion in February 2023.

Costco also rolled out a new mobile app homepage on iOS, Galanti said. It now loads in less than 2 seconds, versus 8 seconds before the change.

“Needless to say, that’s important when about 60% of our e-com business — both visitors and orders — are now done via our mobile app and browser,” Galanti said.

On Feb. 28, Galanti said, Costco rolled out Apple Pay to all members online, both web and mobile.

Costco membership growth

Membership continues to grow as well, he said. Costco ended its Q2 with 73.4 million paid household members, which is 7.8% year-over-year growth. Costco also had 33.9 million paid executive members in Q2. That’s 646,000 more executive members than the prior year’s Q2.

Galanti said executive members represent slightly more than 46% of paid members, yet a little more than 73% of worldwide sales.

What is Costco Next?

Costco Next is the retailer’s way of connecting members with its top suppliers through an ecommerce website. The suppliers drop-ship those orders. Galanti said there are 70 Costco Next brand sites, and 15 more are in development. He said he anticipates ending the calendar year with 90 Costco Next sites.

How many stores does Costco have?

Costco currently operates 875 warehouses. 603 are in the United States and Puerto Rico, 108 are in Canada, and 40 are in Mexico. Outside of North America, Costco has:

• 33 in Japan
• 29 in the United Kingdom
• 18 in South Korea
• 15 in Australia
• 14 in Taiwan
• Six in China
• Four in Spain
• Two in France
• One each in Iceland, New Zealand and Sweden

Furthermore, Costco also operates ecommerce sites in:

• The U.S.
• Canada
• The U.K.
• Mexico
• South Korea
• Taiwan
• Japan
• Australia

Costco earnings

For the fiscal second quarter ended Feb. 18, 2024, Costco reported:

• Net sales increased to $57.33 billion. That’s up 5.7% from $54.24 billion in the prior fiscal year’s second quarter.
• Costco’s net income in the quarter was $1.74 billion. That’s up from $1.47 billion the prior year.
• Costco ecommerce sales increased 18.4% year over year.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s update.

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