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Costco's hardware, sporting goods, home furnishings, and gift cards categories led ecommerce sales growth in Q1. The retailer also completed its first targeted retail media network campaign in the quarter.

Costco Wholesale Corp. started its fiscal year off strong from a digital standpoint, growing ecommerce sales in Q1.

That’s more than double the rate of total comparable company sales growth in its fiscal first quarter, which ended Nov. 24. Total comparable sales grew 5.2%.

Costco net income in Q1 grew to $1.798 billion, from $1.589 billion in the year-ago period. Meanwhile, Costco net sales in Q1 grew to $60.99 billion. That’s up 7.5% from $56.72 billion a year earlier.

In the U.S., comparable sales grew 5.2% year over year. Comparable sales in Canada increased 5.8%, and other international comparable sales grew 4.7%.

Traffic and shopping frequency increased 5.1% worldwide and 4.9% in the U.S., chief financial officer Gary Millerchip told investors on the retailer’s earnings call. At the same time, average order value increased 0.1% worldwide and 0.3% in the U.S.

Costco is No. 7 in the Top 1000 Database. The database is Digital Commerce 360’s ranking of the largest online retailers in North America. It’s also the fourth-largest Mass Merchant in the database.

Costco ecommerce sales rise in the double digits again in Q1

In Q1, Costco ecommerce sales increased 13% year over year.

U.S. consumers downloaded the Costco app 2.9 million times in the quarter, bringing total downloads to about 42 million, Millerchip said. Ecommerce traffic, conversion rates and average order value all increased year over year, Millerchip said, not specifying the growth rates.

The hardware, sporting goods, home furnishings, and gift cards categories each grew their ecommerce sales in the double digits year over year, Millerchip said.

Also in Q1, Costco Logistics — the retailer’s fulfillment division — completed nearly 1 million deliveries, president and CEO Ron Vachris said. Then, in the week before the retailer announced Q1 earnings, it completed more than 196,000 deliveries. He said the retailer is gaining market share with its ecommerce big-and-bulky fulfillment via Costco Logistics.

Costco Next, the retailer’s marketplace, “achieved record sales” over the Thanksgiving, Black Friday and Cyber Monday sales period, Millerchip said, not quantifying the growth.

U.S. consumers spent more than $41 billion online during the Cyber 5, the five-day stretch from Thanksgiving through Cyber Monday, Digital Commerce 360 previously reported.

Costco enters the retail media arena

Costco joined other Mass Merchants and Food & Beverage retailers in launching its own retail media network. It follows Walmart, Target, Kroger and Albertsons, which all have their own first-party-data marketing divisions.

Retail media networks are a type of advertising platform where retailers can sell ad space on their own digital channels to third parties. Advertisers can target their ads using the retailer’s first-party data on customers, including information from loyalty programs. Ads can be placed on retailers’ websites, within mobile apps or in stores via screens and displays. Retail media networks also open up new revenue streams for retailers.

Costco completed its first targeted retail media network campaign in Q1, Millerchip said.

The campaign achieved two to three times the return on ad spend (ROAS) that Costco would typically expect, he said. Costco’s retail media network team is now working with 25 suppliers, he added.

“To use a baseball analogy, we are very much in the early innings with retail media, but we continue to believe this represents a significant growth opportunity in the future,” he said.

Millerchip referred to retail media as “an incremental opportunity.” A lot of the interest in retail media is coming from marketing agencies, he stated.

“Not only will we help you reach a Costco member, we will help you reach the right members in the right context based on past behavior,” said Mark Williamson, assistant vice president of retail media at Costco, in a Marketing Brew report earlier this year.

How many members does Costco have?

Costco income from membership fees grew to $1.166 billion, Millerchip said. That’s a 7.8% year-over-year increase, or up $84 million. The recent membership fee increase “doesn’t have much impact yet” because of deferred accounting, he said, adding that it represented less than 1% of the fee growth in the quarter.

In the U.S. and Canada, Costco’s membership renewal rate was 92.8% in Q1. Worldwide, it was 90.4%.

Costco ended Q1 with 77.4 million paid household members, Millerchip said. That’s 7.6% year-over-year growth. And within those households, 138.8 million are cardholders, which is 7.2% more than the prior year.

Also at the end of Q1, Costco had 36.4 million paid executive memberships — 9.2% growth. Executive members represent 46.8% of paid members and 73.1% of worldwide sales, he said.

‘Fun facts’ from Costco CEO

In its U.S. food courts, Costco set a new record on Halloween for the number of pizzas it sold, according to Vachris. Costco sold 274,000 pizzas that day, a 21% increase. Weeks later, after the quarter ended, its U.S. bakery division sold 4.2 million pies the three days prior to Thanksgiving, Vachris said, calling the statistics “fun facts.”

Costco opened seven warehouses in the quarter, including one relocation and six net new buildings. Four of those were outside the U.S. It opened another after the quarter ended, on the day before Thanksgiving, in Pleasanton. That’s the wholesaler’s 897th warehouse. Vachris said it had the highest-ever opening day sales for a U.S. Costco warehouse at $2.9 million. Costco expects to open 29 locations in its fiscal 2025.

How many countries have a Costco?

As of the end of its fiscal Q1 2025, Costco operates 897 warehouses. Of those, 617 are in the United States and Puerto Rico. Listed by amount, the rest are in:

  • Canada (109)
  • Mexico (41)
  • Japan (36)
  • The United Kingdom (29)
  • South Korea (19)
  • Australia (15)
  • Taiwan (14)
  • China (7)
  • Spain (5)
  • France (2)
  • Iceland (1)
  • New Zealand (1)
  • Sweden (1)

Costco operates ecommerce sites in:

  • Australia
  • Canada
  • Japan
  • Mexico
  • South Korea
  • Taiwan
  • The United States
  • The United Kingdom

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

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