Costco Leans Into Memberships Amid Tariff Uncertainty

Core Insights - The Trump administration's tariffs on Canada and Mexico create uncertainty for Costco, but the company is well-prepared to handle potential impacts due to its strong supplier partnerships and nimble operations [1][2]. Financial Performance - Costco's second-quarter net sales increased by 9.1% to $62.53 billion, with net sales for the first 24 weeks of fiscal 2025 rising by 8.3$123.52 billion [4]. - Comparable sales grew by 6.8%, with U.S. sales up 8.3% and Canadian sales up 4.6%. eCommerce sales surged by 20.9% [5]. - February sales rose by 8.8% to $19.81 billion [5]. Membership and Customer Engagement - Membership income increased by 7.4%, with renewal rates at 90.5% globally and 93.0% in the U.S. and Canada [6]. - Paid memberships rose by 6.8% to 78.4 million, while total cardholders grew by 6.6% to 140.6 million. Executive memberships accounted for 36.9 million cardholders, representing 73.8% of worldwide sales [7]. Digital Growth - Digital metrics showed significant improvements, including a 13% increase in site traffic, a 10% rise in average order value, and a 19% increase in logistics deliveries [8]. - A new digital multi-vendor mailer is enhancing member engagement by allowing more targeted marketing [9]. Store Expansion - Costco plans to open 28 new stores by the end of fiscal 2025, currently operating 897 warehouses, including 617 in the U.S. and Puerto Rico, and 109 in Canada [7].