Costco Leans Into Memberships Amid Tariff Uncertainty

As the Trump administration rolls out — and rescinds — tariffs on Canada and Mexico, investors were anxious to learn how the policy would impact Costco. The company’s reliance on membership fees for more than 70% of its operating profits gives it an advantage over competitors in an inflationary environment.

“The tariffs are very fluid right now, so it’s hard to give any predictions about what we can do, but our people are well equipped to deal with anything coming our way and we have great partnerships with our suppliers,” CEO Ron Vachris told analysts Thursday (March 6) during the company’s second-quarter earnings call. “Our people are nimble and ready to go.”

Recent PYMNTS data reveals 72% of consumers expect higher prices, 66% expect product shortages due to the potential tariffs and 53% expect higher support for local businesses. Additionally, the data shows many consumers admit to not being sure about the impacts of tariffs on issues beyond higher prices.

Read more: Costco CEO: Digital Sales Outpacing Overall Growth on ‘Tech Journey’

Costco Customers Showing Positive Signs

While many other retailers have referenced consumer uncertainty on recent earnings calls, that wasn’t the case for Costco officials.

“We’re not really seeing any change in our members the last few quarters,” Chief Financial Officer Gary Millerchip said. “They’re focused on value and they’re being very choiceful where they’re spending their dollars. We’re also seeing some indications members are spending more on food at home than food away from home.”

As a result, Costco’s second-quarter net sales rose 9.1% to $62.53 billion, while net sales for the first 24 weeks of fiscal 2025 increased 8.3% to $123.52 billion.

Second-quarter comparable sales grew 6.8%, including 8.3% in the U.S. and 4.6% in Canada, and eCommerce sales rose 20.9%. Overall comp sales for the first 24 weeks of fiscal 2025 grew 6% while eCommerce sales rose 17.1%. Meanwhile, February sales rose 8.8% to $19.81 billion.

Costco — which raised its membership fees last year for the first time since 2017, to $65 from $60 for basic memberships and from $120 to $130 for Executive plans — reported a 7.4% increase in membership income, with renewal rates of 90.5% worldwide and 93.0% in the U.S. and Canada.

Paid memberships rose 6.8% to 78.4 million, while total cardholders grew 6.6% to 140.6 million. Executive memberships comprised 36.9 million cardholders and represent 73.8% of worldwide sales. Top sales categories were gold and jewelry, home furnishings, small electrics, hardware, sporting goods, housewares and toys.

Costco currently operates 897 warehouses, including 617 in the United States and Puerto Rico, and 109 in Canada. Vachris said the company plans to open 28 new stores by the end of fiscal 2025.

See also: PYMNTS’ Shopping Apps Ranking Reveals Best in Personalized Customer Experiences

Positive Digital Metrics

Digital metrics also showed significant gains, with site traffic up 13%, a 10% increase in average order value and a 19% increase in Costco logistics deliveries, Millerchip noted, adding there have been 43 million visits to the new warehouse tool on the app.

“We continue to make progress with our digital tech road map,” Millerchip added.

He also noted that a new digital multi-vendor mailer is having an impact on member engagement.

“It helps us be more targeted with our members,” he added. “We started it last month, and there’s more to come on that front.”