Costco's Digital Sales Surge 21% as Members Maintain Spending

Core Insights - Costco's fiscal first quarter demonstrated strong digital transformation with double-digit growth in digital comparable sales and increased app engagement, indicating member spending consistency despite economic uncertainty [1][2] Sales Performance - The company reported net sales growth of 7.2% to nearly $66 billion, with comparable sales increasing by 6.4% [2] - Digitally enabled comparable sales surged by 21%, while U.S. comparable sales rose by 5.9%, ticket sizes increased by 3.2%, and traffic grew by 2.6% [2] Membership Growth - Paid memberships reached 81.4 million, up 5.2%, and cardholders totaled nearly 146 million, up 5.1% [3] - Management anticipates over 30 net new store openings annually [3] Digital Initiatives - CEO Ron Vachris highlighted advancements in technology, including scanning memberships at entry and the Costco digital wallet, which improved member experience and productivity, with checkout speed enhancements of up to 20% in early adopters [4] - Digital sales growth was driven by increased app traffic (over 40%) and a 24% rise in eCommerce site traffic, alongside a 13% increase in average eCommerce order values [4] Consumer Behavior - Fresh grocery sales experienced mid- to high single-digit growth, with meat sales showing double-digit increases, and Kirkland Signature private label products outpacing overall sales growth [5] Pharmacy Operations - AI is utilized in the pharmacy inventory system to compare drug pricing and autonomously reorder inventory, achieving over 98% in-stock rates and mid-teen growth in pharmacy scripts filled [6] Future Technology Initiatives - The company is focusing on enhancing core systems to support future growth, with expectations that digital sales will continue to outpace overall sales as more members engage digitally [7][9] - CFO Millerchip noted the potential for retail media to deliver personalized communication at scale, indicating early successes but recognizing it as an ongoing opportunity [8][9]