Costco Q2’FY23 Earnings Summary

- Comparable sales grew 6.8% q-o-q, alongside traffic growing 5% worldwide, 7.3% in Canada, 3.5% in the US and 11.5% in other countries

- E-commerce sales declined 9.6% in the quarter 

- Gross margin grew 8% in the quarter

- Operating income grew 8% y-o-y

Costco was able to withstand such a macro backdrop than most large retailers and their performance was driven by several factors, such as higher membership fees, lower merchandise costs, and increased ancillary businesses like gas stations and pharmacies. Though it’s worth noting that there was a 15% pullback in sales of big-ticket discretionary items due to the current high-inflation environment.

Their membership renewal rates reached an all-time high of 92.6% in US and Canada (which accounts for 73% of their total sales) and 90.5% worldwide. Its executive membership mix reached 45% of total members in the quarter, which shows the consumers resonating with their value proposition. 

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