Costco's stock reached an all-time high yesterday after the company reported stronger-than-expected quarterly results. The warehouse retailer's shares jumped nearly 5% in trading, continuing what's been an impressive run throughout 2025.
The big news? That membership fee increase they implemented back in January is really paying dividends (literally and figuratively). Membership revenue was up 12.3% compared to the same quarter last year, contributing significantly to Costco's bottom line.
"We were a bit nervous about raising fees during uncertain economic times," admitted CFO Gary Millerchip during the earnings call. "But our renewal rates have actually improved to 93.2% in the U.S. and Canada."
I've been a Costco member for over a decade, and honestly, I barely noticed the fee increase. The value proposition is still incredible - where else can you get a hot dog and soda for $1.50 in 2025? (Though I'm still mourning the loss of the Polish dog...)
Beyond membership fees, same-store sales grew by 5.1%, beating analyst expectations of 4.7%. Online sales were particularly strong, up 18.2% year-over-year, as Costco continues to improve its e-commerce capabilities.
The company also announced plans to open 30 new warehouses this year - 22 in the U.S. and 8 internationally. They're particularly focused on expansion in Asia, where their stores in Japan and South Korea have been performing exceptionally well.
"Costco has found the perfect formula," retail analyst Thomas Wang told me. "They're benefiting from consumers looking for value during inflation, but they also attract high-income shoppers who appreciate quality."
Not everything is rosy, though. Gross margins dipped slightly as the company continues to absorb some inflationary pressures rather than passing all costs to consumers. And competition from Walmart's Sam's Club and BJ's Wholesale remains fierce.
For investors, the question is whether Costco can maintain this momentum as economic conditions evolve. But with its loyal membership base and disciplined business model, I wouldn't bet against them. The Kirkland Signature brand alone is a powerhouse that keeps members coming back.
As one shopper told me in the parking lot of my local Costco yesterday: "I came in for paper towels and somehow spent $300. Every. Single. Time."
That, in a nutshell, is why Costco's stock keeps climbing.
