The following is a summary of the Costco Wholesale Corporation (COST) Q4 2024 Earnings Call Transcript:

Financial Performance:

• Costco's Q4 net income was $2.354 billion, up from $2.16 billion year-over-year, with earnings per share increasing to $5.29 from $4.86.

• Net sales for the quarter reached $78.2 billion, marking a 1% increase year-over-year, with adjusted net sales up 7.3%.

• Membership fee income rose slightly to $1.512 billion, with an overall renewal rate of 92.9% in the US and Canada.

Business Progress:

• Costco opened 14 new warehouses in Q4, including 10 in the US, 1 each in Korea and China, and 2 in Japan, reflecting a strategic expansion in both domestic and international markets.

• The company continues to see strong e-commerce growth, with a 18.9% increase in e-commerce comparable sales and advancements in digital capabilities such as improved app functionalities.

• Notable milestones include reaching 76.2 million paid household members and 136.8 million cardholders, a year-over-year increase of 7.3% and 7%, respectively.

Opportunities:

• The continuous growth in Costco's member base, particularly younger demographics under 40, coupled with a rising executive membership, which represents 46.5% of paid members and 73.5% of worldwide sales, highlights significant growth potential.

• The expansion of e-commerce and logistics capabilities, such as the completion of the buy online and pickup in warehouse for TVs, supports a robust future in digital sales channels.

• International expansion plans, including 12 new stores outside the US for fiscal year 2025, present opportunities to capture global markets.

Risks:

• The port strike poses a potential risk as it could affect the import of non-food items, which constitute about 25% of Costco's total business. The company is actively monitoring the situation and has made some preemptive shipments to mitigate potential disruptions.

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