Costco (COST) ended 2024 on a strong note, despite cracking down on membership card sharing and increasing membership prices last year.
In its latest earnings report, Costco revealed that it generated a net income of $1.7 billion during the last few months of 2024, which is 2% higher than what it earned during the same time period in 2023. Costco also saw its comparable sales in the U.S. increase by 8.3% year-over-year.
Despite increased consumer momentum, Costco flagged during an earnings call on March 6 that it noticed that its gas comparable sales shrunk during the quarter.
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“Gas comps were negative low single digits during the quarter, driven by the average price per gallon being down slightly,” said Costco Chief Financial Officer Gary Millerchip during the call.
The national average for gas prices began dropping after April last year. By September, the national average price of a gallon of gas stood at $3.20, increasing competition for Costco, which exclusively offers members low prices on gas.
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Amid this trend, Costco CEO Ron Vachris confirmed during the earnings call that the company recently extended its gas station hours in the U.S.
“In addition to adding warehouses to serve our members, we also extended our gas station hours in North America during the quarter to make filling up at Costco more convenient for our members,” said Vachris during the call. “Generally, our stations are now staying open an hour later than they did previously, with some opening earlier as well.”
A woman pushes a packed cart out of Costco.
Image source: Ting Shen/Xinhua via Getty) (Xinhua/ via Getty Images
Last month, Costco posted a list of its updated gas station hours on Facebook. The post states that gas stations are open Monday through Friday from 6 a.m. to 10 p.m., Saturday from 6 a.m. to 8:30 p.m., and Sunday from 6 a.m. to 7:30 p.m.
These hours, however, may vary for members who are located in California and Hawaii.
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Vachris also said during the call that extending Costco’s store hours is “not off the table.”
“We did see some demand from the commuters, both at the early hours and the evening hours, so I think that that’s going to be a real benefit to those folks as well,” said Vachris when speaking about possible extended store hours. “But we will continue to look at the warehouse hours. No plans in place at this time.”
Costco claims that the extended gas station hours have so far yielded increased gas station usage from members.
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During the earnings call, Costco also warned investors that its customers are becoming more cautious about their spending due to the current macroeconomic environment.
“We believe that the member is probably as much focused now on quality, value, and newness as they have been for quite some time,” said Millerchip. “But they are still showing that willingness to spend, but they’re being very choiceful where they’re spending their dollars. And we think that’s likely to continue and maybe even become more choiceful as the impact of some return of inflation and the potential impact of tariffs could flow through as well.”
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While the company is seeing increased sales of fresh foods and low-cost meat items, it has seen flatter sales in electronics and apparel.
Inflation and tariffs aren’t the only threats to Costco’s future sales.
The warehouse club faced boycott threats from consumers in January after it defended its diversity, equity and inclusion program against a group of shareholders who introduced a proposal that aimed to get rid of it due to concerns about it causing legal, reputational and financial harm.
The majority of Costco’s shareholders later voted against the anti-DEI proposal during its annual shareholder meeting, which further infuriated some consumers.
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