Benzinga - by Tornado, Benzinga Contributor.
The following is the Analyst Q&A from Costco’s (NASDAQ: COST) 2Q 2024 earnings call:
- Question about membership fee increase strategy:
No immediate plans to increase fees; focus on delivering value and monitoring business performance.
Fee increase is a matter of "when" rather than "if," but timing is still under consideration
- Question on U.S. expansion and warehouse openings:
Membership renewal rates increase with new openings.
Growth opportunities also seen in international markets.
- Question on price investments in response to competitors:
No need for sizable price investments; confident in current positioning.
- Question on evolution of Costco's model and technology use:
Technology is a key priority for enhancing member engagement and driving business.
Data and retail media seen as significant opportunities for growth.
- Question on gross margin ceiling adherence:
No plans to change this approach; focus remains on aggressive pricing for value delivery.
- Question on digital and e-commerce strategy:
Focus on foundational improvements for better fulfillment and reliability.
Personalization and integration of warehouse and online offerings are opportunities.
- Question on discretionary sales and member spending:
Categories like Home, Toys, and Sporting Goods are leading due to exciting merchandise.
- Question on leadership changes and potential strategy shifts:
Innovation and adaptation to member needs will persist.
- Question on vertical sourcing strategy:
Focus on partnerships and stepping in where necessary, but no major expansions announced.
- Question on Instacart gift cards and strategy:
Partnership with Instacart and Uber expands delivery options and member engagement.
- Question on warehouse cannibalization and new openings:
International expansion continues with some regions taking longer for new openings.
- Question on SG&A rate potential decrease:
Warehouse efficiency and technology can drive down SG&A rate.
- Question on gas gallons growth and impact on traffic:
- Question on unit growth acceleration potential:
- Question on Uber partnership and multi-provider delivery strategy:
- Question on non-foods innovation and competitive environment:
Costco is competitive and gaining market share in various categories.
- Question on Costco Logistics growth drivers:
Costco Logistics only delivers for Costco members, no partnerships included in reported growth.
- Question on Costco Next and marketplace model:
Marketplace will be curated to maintain unique and valuable offerings for members.
This article was created with assistance from Tornado’s AI platform (ai.tornado.com).
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