Costco Hikes Membership Fees At Long Last; Analysts Caution Of 'Sell The News' Event, Point To Stock Underperformance After Last 3 Hikes

Core Insights - Costco Wholesale Corporation announced a membership fee increase, adding $5 for Gold Star and Business memberships and$10 for Executive memberships, effective September 1, impacting approximately 52 million members [1] Membership Fee Increase Impact - Analysts estimate the membership fee increase could add around $377 million in revenues over the next 24 months, translating to about$189 million annually [4] - The fee increase is expected to contribute approximately 31 cents to earnings per share in 2025 [4] - The membership fee increase is viewed positively as it supports Costco's value proposition, potentially increasing shopper frequency and store traffic [3][5] Sales Performance - Non-food comparable sales rose by low double digits in June, marking the eighth consecutive month of positive segment growth, indicating potential market share gains [2] - Traffic increased by 6.6% globally and 5.9% in the U.S. [3] - Strong growth was noted in non-food categories such as jewelry, gift cards, toys, and gold bars [5] Regional Performance - The best performing regions in the U.S. included the Northeast, Texas, and the Southeast, while international performance was led by Mexico, Australia, and Korea [6] Analyst Ratings and Price Targets - Stifel raised its price target from $900 to$950, maintaining a Buy rating [2] - Bank of America raised its price target from $874 to$962, also maintaining a Buy rating [2] - DA Davidson maintained a Neutral rating with a price target of $780 [2] - Goldman Sachs and Telsey analysts also provided positive outlooks, with price targets of$851 and $925 respectively [2]