Costco holds its financial momentum

For Costco CFO Richard Galanti, it was not a bad way to go out from an earnings standpoint.

Galanti hosted the second quarter earnings call for the retailer before retiring, and the numbers were strong.

Net sales for the second quarter came in at $58.44 billion, just below the Wall Street estimate of $59.04 billion.

However, that was really the only downfall as same-store sales growth, excluding gas and foreign exchange, increased 5.8% (Wall Street estimate was 4.65%) year over year. U.S. same-store sales growth was 4.8% (Wall Street estimate was 4.09%).

Membership fees stacked up to $1.11 billion in the second quarter, which is better than the $1.03 billion a year ago.

Ecommerce increased 18% year over year.

Grocery helped lead the charge. Food and sundries sales improved in the mid-single digits year over year while fresh foods increased in the high single digits.

Traffic in the U.S. increased 4.3% in the second quarter versus Q2 2023 and the average ticket was also up.

Costco introduced a new mobile app homepage in February that is six seconds faster to upload compared to the previous version. Galanti said the improvement was critical since 60% of business comes via the app and mobile browser.

Apple Pay also was made available to all members online, and more products are being added to Costco Next, which allows members to buy directly from some suppliers at a discounted price.

Four new Costco stores opened during the second quarter, three in the U.S. and one in China. Galanti, who will be replaced by former Kroger CFO Gary Millerchip, said tour buses were taking shoppers to the Costco in Shenzhen, China.