Wagyu beef, $1,200 swing sets, and fake trees are helping drive up Costco sales
Costco Wholesale.Tim Boyle/Getty ImagesCostco beat sales expectations in its third-quarter earnings, released Thursday.Newly appointed CEO, Ron Vachris, highlighted some of the items that were driving the bottom line.Wagyu beef, golf clubs, artificial trees, and gold bars are all being snapped up by customers. Costco is having a good year, and it has a range of "unique items'" to thank.Sales hit $57.39 billion in the third fiscal quarter of 2024, an increase of 9.1% compared to the same period last year, the company reported during earnings Thursday.The products driving these gains for the retail giant include artificial trees, Swedish dish towels, wagyu beef, and, a unique Costco favorite, gold bars."We've got seven-foot artificial trees that have come in and just exploded out and just blowing out of the warehouses," said CEO Ron Vachris on an earnings call with investors."Wagyu beef and prime are growing at a great clip for us," he added during the call. The CEO also highlighted Kirkland Signature golf clubs, a $1,200 swing set, and inflatable outdoor toys as top sellers."We see big and bulky going very well. It's been a year of our $1,200 swing set that we have on the floor," Vachris said. "We can't get enough, they're just blowing out."Gold and silver bullion, which Costco started selling in 2023, continues to lead e-commerce sales growth.The company moves about $200 million in gold bars and silver coins a month and they get snapped up "within a few hours," analysts have previously predicted.Wagyu beef and ground beef are best-sellers at Costco.UCG/Getty Images"Import items we're finding from around the world are doing very well. But it really comes down to unique items at great values that are exciting the members in all those categories," Vachris told investors."Continuous innovation of merchandise" is what continues to excite Costco customers, the CEO added.Vachris took over from Craig Jelinek as CEO at the start of this year. The transition had been a "seamless process," he said during the call.Overall, net income was up 29.1% on the year, hitting $1.6 billion for the quarter. E-commerce sales saw a 20.7% jump, while app downloads grew 32% to a total of 35 million.Despite the positive results, shares in the company were broadly flat in premarket trade before the bell on Friday.Costco stock is still up 25% this year, and the company's valuation is reaching close to record highs.Looking forward, the wholesale retailer announced that it was planning to open 12 new locations in the next three months — nine in the US, two in Japan, and one in South Korea.Vachris also said technology would be a key priority in driving business and would be used to improve the member relationship.Though Costco highlighted its strong retail sales, because the company sells merchandise at extremely low mark-ups, the membership fees are the key way it is able to turn a profit.Some analysts have predicted that Costco will raise its membership fee this summer.CFO Gary Millerchip addressed the claims during Thursday's call, refuting that a price increase was imminent, but admitting that it was a matter of when, not if.Read the original article on Business Insider
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