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Costco surpasses earnings expectations as e-commerce sales see a significant increase

E commerce

Business Honor
13 December, 2024

Costco exceeds earnings expectations with a 13% rise in e-commerce sales, strong membership growth, and increased revenue.

Costco posted solid first-quarter earnings above Wall Street expectations, including strong e-commerce growth. The membership-based warehouse club saw e-commerce sales rise 13% from the same quarter last year, a big driver of its robust performance. As Costco expands its online presence, it gains market share in shipping big and bulky items. The company's CEO Ron Vachris mentioned that the company set a new record with nearly 1 million deliveries during the quarter.

Online traffic, conversions, and average order value all rose sharply. The efficiency of delivering large items helped the company edge out in the competitive e-commerce space with a growing number of customers preferring to shop online besides going to the store. Overall, Costco's growth in online sales reflects its strategy of integrating the e-commerce platform with the physical stores.

Costco has seen the transformation come with robust membership growth. In fact, it has recorded an addition of 8% more paid household members per year, now reaching a total of 77.4 million members worldwide. With membership coupled with robust online performances, the company has succeeded in recording total revenues of $62.15 billion for the quarter, above the analysts' expectations.

It seems the strategy that Costco has adopted and continued in is actually making shopping a seamless experience for its customers, combining e-commerce with the value of bulk purchases. Costco has maintained the high average order values but simultaneously lowered prices on certain private label products, such as those items that fall under Kirkland Signature, which has positively influenced online sales.

As the company continues to expand its digital reach, Costco is poised to remain a strong player in both the e-commerce and brick-and-mortar retail sectors.