Costco has resumed selling Kirkland Signature Semi-Sweet Chocolate Chips after a July 2024 hiatus driven by cocoa-cost pressures. The Nestlé Toll House substitute was less favored by shoppers, and Kirkland remains cheaper for the 4.5-pound bag at about $12-$14 versus Nestlé’s $16.99. The move could lift baking-category traffic and private-label loyalty, with modest near-term earnings impact depending on inventory balance between Kirkland and Nestlé products.
Costco announced an expansion of its Digital Membership Card, enabling members to link any Visa card to the Costco app and pay via smartphones at warehouses (food court excluded). The upgrade aims to speed checkouts and boost digital wallet adoption, potentially lifting member engagement and Visa usage at Costco in the near term.
Costco reported strong June performance with five-week net sales of $29.24 billion, up 10.6% YoY, driven by U.S. traffic gains. Canada grew modestly while currency effects and gasoline deflation tempered the overall impact. Despite solid demand, shares traded below key moving averages, signaling near-term caution until momentum improves.
Costco benefits from a membership-driven, recurring revenue model, with renewal rates above 90%, providing earnings visibility in uncertain macro conditions. The rally reflects demand for defensives as rate-hike fears persist after a hotter May payroll print; COST could gain market share via trade-down while staples stay resilient.
Costco’s third-quarter results benefited from a surge in gas demand as shoppers sought value amid macro uncertainty and higher energy costs. Management flagged record gas volumes and peak weeks, signaling stronger member loyalty and cross-store spending as fuel traffic translates into warehouse sales. Elevated gas prices and a widened price gap versus peers could sustain near-term momentum.
Rising energy costs tied to the Iran conflict have translated into roughly $60 billion of increased spending by U.S. consumers, with per-household energy expenses averaging about $447.19 since the war began. Gas and airline-fare costs have surged, while Costco disclosed record gas-volume activity at the end of its fiscal quarter, suggesting near-term traffic benefits from cheaper fuel at COST locations. Goldman Sachs warns that higher energy prices could erode consumer spending through 2026, creating a mixed macro backdrop for COST’s earnings trajectory.
