Costco Wholesale (COST) 14 Dec 232024 Q1 Earnings call transcript

Good day, everyone, and welcome to the Costco Wholesale Corporation Fiscal First Quarter 2024 Earnings Call. Today's call is being recorded. [Operator Instructions] I would now like to turn the call over to Richard Galanti, Chief Financial Officer. Please go ahead, sir.

Thank you, Lisa, and good afternoon to everyone. stating meaning discussions Litigation of of by statements include Reform start XXXX. the within the will that will these forward-looking Act I Private Securities results that involve indicated those statements. cause and statements such to uncertainties These actual materially risks by events, and/or from performance differ may SEC. The uncertainties company's filed time from to are in the include not outlined reports to those identified risks today's other call the risks statements and public with and in as but limited well as time

statements of not made, to as Forward-looking as and the update except are only date they speak the statements, law. company undertake required does by these

sales comparable Comparable in GAAP. as and prices information accordance and from exchange sales sales net changes supplemental in a gasoline presented excluding impacts not and with intended are are foreign for substitute

shipping per results a results primarily $XX quarter we net a year. and of tax or $X.XXX XX. in year's November million in a for first release, This weeks tax the per share downsizing related a quarter $X.XX first charge quarter to Reported billion year's activities. the 'XX, included $X.XXX $X.XX today's share, reported charter XX-week included share also XX-week pretax to per last Last $X.XX of compensation. came XX first related the benefit the up fiscal In million $XX share of share from $X.XX per or million stock-based compensation billion ended or $X.XX related benefit or included or stock-based our $XX of results at income for operating to

of billion. X.X% and of XXrd X% from week last fiscal increase billion, $XX.XX benefited in the result calendar by were in shift the year's approximately quarter X.X% to first the were for first the fiscal a $XX.XX quarter, sales sales as XXXX. over Net the worldwide U.S. Net a

FX, reported comparable reported gas X.X%, X% and FX, year-over-year In comp reflect Canada comparable retail locations reported X.X%. deflation FX, Other XX.X%, and and following X.X%. The ex gas sales sales International weeks. X.X%. and ex comparable gas the U.S., ex

company which e-com was reported for X.X%, November were FX. reported Nonfood those fiscal October, X.X% and For came sundries X again, excluding did X.X% food excluding as sales. Overall, strong with total relatively showed and foods over fresh once as quarter, X.X% at in the the right time a items. improvement behind. frame first E-commerce, September,

of United metrics, terms the traffic increased shopping worldwide States. sales QX comp or frequency X.X% X.X% and In in

in and X.X% U.S. Our average X.X% down was transaction down the worldwide

million by an X.X% we relative deflation $XX That's statement's or Pies X over Foreign in a X.X the Thanksgiving, weeks currencies sales how up leading we approximately dollar Thanksgiving past few sold price days approximately gotten sold up while X.X%. I've negatively In in impacted impacted the gasoline as sales few to positively by than the U.S. calls to U.S., the many to pies a the to income in U.S. basis leading X our with the X holiday. increase of X.XX%. quarter, X the Pumpkin million so last billion next And quarter and to in million point X.X days. Back apple pies, income. the statement membership first the along on during increase the million here. reported famous income pies In $X.XXX X.X% total pecan year. over we fee or and the more

stood end at up the came XX quarter were rates renewal the Both of in worldwide at weeks our Canada terms XX.X%. XX.X% end, U.S. from In those at at and rate quarter. while of first earlier fourth rates, rate numbers of the X.X% renewal about these

consistent represent cardholders, a year growth XX% weeks XX end, million and XX.X sales. XXX,XXX X.X%, members Membership of now paid X.X% of a little increase At we with our since XX% worldwide end. up and an XXX.X quarters. growth little over QX paid the of XX.X the over We had up continues. during members, household ended paid throughout with QX last members, million million Executive Executive members versus QX

our down income Moving margin. next the statement, is gross

the basis up quarter from gross points, points. XX deflation was year-over-year fourth at margin XX last XX.XX%. by plus XX.XX%, basis reported in XX number higher coming Our QX at be year in would ex point gas reported That of basis

columns As items. I we down and here, write do normally line X X

is in The quarter. first first reported column the

core The merchandise, gas LIFO, reported, and plus X reward ex deflation; the and gas year-over-year deflation. Ancillary basis the points XX% X quarter. for X XX On XX a basis deflation. second and minus points excluding It's X total, XX plus change and is year-over-year, up lower plus minus basis and minus basis reported plus XX% up year-over-year businesses, margins ex column and points in first reported X% reported X other and ex again, plus points. XX a deflation plus deflation; basis X plus ex gas gas points other

company, ex minus total and X was reported core. and deflation. it Starting the gas with plus X it was Again,

gross their core deflation. In terms by XX and of by ex own was gas increase This year-over-year. driven X on other our core-on-core higher e-comm. again, and Ancillary were XX margins margin, business points gas sales, largely basis by up by and margin higher

reflecting members. sales our Our from higher X X% by Executive by deflation, penetration X and higher reward higher ex coming

year. the We credit $X.X of million small this very points. basis basis This item, ago. XX in charge to to points X QX $XX the had LIFO then a a the line And million year the a other first compared positive. LIFO quarter plus LIFO in

mentioned last related activities. pretax our charter year impact of shipping for was primarily As point QX, downsizing $XX the basis primarily million in was a -- earlier, a there XX charge, from

I'm was an XX higher impact scale by by wages, past last of gas. without increase basis again, -- not in without our well. for minus points. represents September of reported weeks XX those X. the X, wages higher roughly And That this in estimated Stock point minus Central points minus be of the XX Again, margin, gas -- minus Canada. March's from the a down higher basis minus X. Moving again year's and minus estimated and X.XX%. margin to we're to hit. X QX, and XX XX sorry, minus points, quarter the operations, X.XX%, basis compensation being right which it's as by SG&A, X The SG&A and in basis reported higher and minus top wage X X basis columns. We minus minus deflation, extra raised This new higher starting excluding XX, included as we total points X impact XX Reported higher year-over-year. from SG&A. on than of XX and deflation, by meaning and XX U.S. year-over-year expense, Preopening X and gas XX,

did a higher, million other a million basis X high in stock Again, to say of central, $XXX did $XXX $XXX additional increase couple it interest comp's, year, year the nothing this than quarter interest Xx was year, gas minus cash income We impact was $XXX expense was excluding we million by in than versus higher at was was last The this FX $XX Again, was income, due small deflation. than other $XX favorable interest that year. of coming preopening. million openings the higher higher well million balances. that million, and Interest $X quarter rates to about largely figure. million points. Below million This driven more higher gas much this income year-over-year. basis last have by deflation in X the its last and operating point by line, and year year's as the as $XX for the

the The is quarter of up first the of in -- to rate compares quarter. A stock-based income QX in year. XX.X% QX percentage XX.X%. lower terms this from primarily In taxes, of than tax income compensation our the year to year year or was points year-over-year last ago from net rate ago. few a our higher in X.X increase other items XX.X% was Overall, attributable note. as a reported benefit in This

the -- the in X of a of X X U.S. opened including relo, we X increases. locations, included in first XX expansion, in terms Canada. In and those That so quarter, net X warehouse

the 'XX, from in warehouses that 'XX. that a XX up estimate of fiscal X XX increase so we're full XX net locations, opening to including opened we For would be -- new open year we fiscal relos, planning for

new For sixth 'XX, including X building year. we calendar the QX plan our locations, in in fiscal China early

in capital first spend the fiscal expansion $X.X $X.X we approximately a expenditures, from We number fiscal capital 'XX billion expenditure billion the quarter up billion. that that be had was of will reflecting continued in the 'XX, Regarding range. $X.X That's estimate billion doing. we're $X.XX in CapEx increase to

September, pet mid-XXs. TVs October, mid-teens. snack e-gift and in areas. aspects challenges e-commerce low the in ex periods X.X%, in showed teens. terms up sales Appliances was during in increase strength the like up the other items the of up in electronics reporting computers, singles things actually of In quarterly year-over-year first like X items, and with business, the despite In increased cards, were consumer were of QX X food, tires quarters in trended well FX fiscal several in November. E-comm high the the year-over-year were e-com

pretty a good overall, showing So there.

we the completed in In quarter last fiscal were e-commerce. year. Add comparable of Costco items deliveries, the up record-breaking 'XX, XX% some versus enjoyed the well, Logistics over quarter front first XXX,XXX in line As deliveries. quarter which

the weeks, We on $XXX we're ounce there, it's e-gift $XXX for [ Mantle And Carden You've sold sale a everything autographed bars. last $XXX,XXX. $XXX.XX. launched X of at airlines, just, million to cards card the Mickey to for a autographed to restaurants addition during Disney shoppers card for perfect that of fact golf we quarter. and in online the We probably Ricky And $XX,XXX. sold nearly read condition for you about soldering e-gift Ruth Babe couple there valued index is last-minute on in from ] gold a XXXX, over gold out

holidays, Cyber year-over-year availability for be e-com to did Black were with big our Saturday, continues and to site mostly made progress Week, in changes sales up Thanksgiving, the good up and Cyber leading enhancements and the mid-teens. X site the No the prep. We Next, Monday efforts. Sunday, have and digital during Cyber Friday, to XXX% holiday mobile Days,

XX% X.XX the and Our app or that's up so quarter were quarter, total over the prior of the XX.X now in versus fiscal being app million million, 'XX during increase after during increase downloads are XX% year. stand a all at downloads

and Our approaching value being just average X.X%. up XX% order and increase about under billion traffic X.X the site

make we progress So continue to there.

had inflation. of we comments regarding was Most X% to recently X% inflation last fourth quarter the Next in discussion, estimated that range. year-over-year couple the in

just ended, that the X% in Our X inflation was for estimate to range. quarter the

sets domestics, cost like bulky, as things and freight lower-priced costs year-over-year significant. items some again, on is Bigger due the well to lower furniture deflation items in freight big like bulky where as

and XX%, good unit's to average mostly to across deflationary XX% SKU counts have been been And and freight-related. higher. TVs, prices again, our lower the inventories shape Some overall, all in as channels. buyers are while were items much as sale our talking the

a had we've far, good seasonal so the sell-through And quarter. during

Lastly, years. dividend will in will accompanied dividend cash special $X.X issuance special as on This will declared this billion we by existing a to any about you in press special XX and afternoon's release, not total of under be and of December cash is XX. January cash using $XX dividend. just per be record fifth on share paid our funded shareholders be debt. The saw XX The payout

market upcoming happy of will after ending any to close. Sunday, back Q&A sales I January for our be to and answer results in announce XX, it on Thursday, will Lisa X for questions. weeks turn terms that, With Finally, December the X, December releases, we

take UBS. question Instructions] from Lasser with first [Operator our We'll Michael

that history. last its so it or over had You had indicated than had Costco years raising the faster throughout prices been X.X

So savings? flat with is posture X%. to along down, now up You coming already that prices passing to inflation be those the noted going what on is

as especially the deflation, So side of get through expect do next couple food you quarters? you on the

have -- haven't Well, that of trend a There talking on either lower first be up our we seek we they We're and way. are vendors that. trend come that different side a out few that seen no to are things fresh at on a end we've -- want shipping to during are saw the a buyers, as don't costs down, buyers seen come pressing time, X the the you to side, commodities-wise, X They But saw the we months. food down the day, the quarter, Look, a know looking us to things are X versus towards commodity certainly for down even as out prices. X. few the as components lot. the nonfood giant there we long we things like and but

And see. less and so than know. a more We have don't probably we'll wait little but to

is point is that draft is that sector. follow-up for profitability time off broader a of long to my Costco the retail you've made the another And going

versus there are is compare you prior coming pandemic, XXX margin Costco's was last to the higher. And over it's operating points the across retail, basis to where XXX If signs XX months down. that profitability yet it

So this going growth here, we've operating seen better. of growing range in further a so mid-single-digit now, way it or be to profit even Costco just maintaining margin further what ability your of from the of existing consistently drive simply rate either function sales to in the or

drive a X example figure we're up. to That But out. were we've at KS last line percent a $XXX-plus the here in Well, certain a get items happily, -- want little Certainly, end to to looking do. you at that's We month, while takes Sure. labor in to of a there's people where go time, drive deflation we you've in net say the couple frequency. for we're able what want company, that one to to we as known the sales. want I'm more up flat and that, just the been I'm that's day, down of the of the units products, as units mid-teens. day, seen to -- top do. At million end long were sales

to Executive the as what what see as out and driving new And and continue people hopefully to see we'll convert continue we get well as to stead. constantly rates they value do as think sign-ups as do, to in to I they long good we renewal do continue there, long best be

do we've think been do to and we'll so that that. to I to And far be continue able able

next We'll Gutman take question Morgan Simeon from Stanley. our with

quarter on it Sussman core like for core seems was and moderated up Jackie margin this sequentially. is The it This and Simeon. modestly

seems expanding bit and Looking on color comparison for how helpful. forward your the to stay any year? should that balance core like rest a Or Could the year, about think of of margin? would we guess it I gets and the core it positive the be tougher. the

There it. parts many moving are to different so

we company and me a -- I say years, to and we'll As top want also you've We say the line drive in we heard last We're for-profit several first. pragmatic. want down we're both. do a lots up continue any there's read It different to to work a fluctuates wouldn't going frankly. little, much it. hard components of and into to I number little or recognize

Friday better were Got a had you. Cyber And just quick you follow-up. Was that Monday what you expecting Black and than the internally? gains

than They're it. were but a we little ready better for we were expecting

next We'll Haskett. from Gordon our Chuck Grom question take with

a Richard, just could into the bit you if flesh I more see little the to core color. some category margins wanted dive of out and

business. sundries, I it, hardlines said it, fresh but you the and food, of If parts the missed on

very Well, slightly down. without giving down, you slightly was and was specific basis sundries Nonfood actually up. points, food

year when a comparing fact trying drive business. that bit. against And down last to the we fresh are little freight costs that and of was had relates we Some to higher

either directions. So of those in nothing Earth-shattering

up I talk think Okay. And But on points, can better the about so margins the were the XX get you we e-commerce ancillary the all gas then much why basis in just quarter? component.

more quarters, -- think, it the into you general sometimes I other they is penetration over of in the businesses. that issue core fact core part a -- look first then showed opposite and in directions, well, ancillary going back it of without that all, sales when on the the just go

we're We're that lot that both and higher that sales And so doing in and had of in we of e-com, big driving helped a a bulky business. you, had strength. you e-com, given and -- lot penetration

at Ron picture, then replaced have taking great. just who Okay, CEO seat the -- a and just question weeks in I change on And the few bigger Jim. with starting a Craig, replacing

standpoint from You've moving work had an X. I'm to the curious see change, we operating you with I what any, could opportunity think guess if forward? fortunate And all

I later, became joke Yes. what's And we're I end going were the a say questions asked I'm it things. nice remember asked ago President, could to But day, always the the review is And for the when X course. And XX-plus became seamless I'm retired so Well, Craig staying I at reality up years questions Craig Jim? and can transition. replace today, who really CEO replace and and years Jim who think the President. -- Craig? is same of

both XX-year number in, he for the have years merchandising retiring was years year X gold real Price again, patch. a started the And on operations, in already years X XX-ish estate operations in business got somebody been his XX-ish in then when in a Ron it's XX world Arizona. who's You that's coming in successful he has been both. of at in a in And Club traveling who or you've and here And and merchandising. years and

So I think it is pretty seamless.

last of very Craig them, X during Jim And X I when work saw later, see Craig Ron it's those the as retired similar President, what became and over took to X together X then to almost X since them the became well. years on and years, the years role CEO President, years

pretty And much goes. as steady so she that's

Scott our question RX Mushkin take We'll with from next Capital.

maybe think quick And to sometimes, I up wanted added X. I a just that. but it obviously, can thoughts And about then seems hear I I any in wonder follow-up. U.S. know you have guess U.S. you in more potential just It comes the runway the like the there's if you had clubs I on

asked, centers, share which be that ago other years the X I I in that, I most to the add -- in -- or are of is you is the X open And yes, U.S.-Canada it will the would it the story now. we same question, warehouses. a per more X way were to when the would we XXs, say today be business XX-XX time, it opportunities. And we sales XX-XX. Well, our U.S. guess will finding the regular Sure. continue finding the was Well, ourselves as well, than International, volume what those be we it's if think over international is I'd or XX, recognize thankfully, low XX asking expected say, ago, by of today, be? I'd or trend today? that would well higher are will I XX-XX it were be year, average versus by it X, roughly today, opportunities we you're XX-XX but this And somewhere those it are XX would U.S. with by what few Clearly, XX-XX what in would as location have And we years today, the regular

good that International International, Last And lot year, will that's still drive going we've things on opportunity So more or to and was or XX, We grow. be X -- timing I view X units as International of of news. this a but X got year. to that a issue.

is follow-up TVs. had my traffic appliances and you and growth then around in also the So like

of kind just going than different a direction lot people. in You're of a

also, gains pretty But driving I those you guys drive share what's the the specifically the you're are Because environment. in they're seeing? amazing, So to given categories? doing different numbers traffic anything mean,

value I attribute and given that is think Yes. look, to quality members the the that always our lowest have. then trust I've good add service certainly of the and price, quantity or Well, of said biggest

of value. price item a like those -- not ago for relates where big retail job competition, the some compared we've We X do you'll you items. like the of delivery, it better some disposition, showing take that's business value strength. other some savings. -- And the I to these we're X the and what to our is, out, having things exact installation, a Go the pointed price the and of now at old years the check there. I communicating I think called -- see away competitors product even of the a the what big combination think But of old then acquired of of away gotten price add just Costco lot delivery, in tires, doing things Innovel as and specific or is significant it's on appliances it's Logistics, take

We'll take our Guggenheim. next with question from Heinbockel John

and the we've journey, is things do I'm may Richard, talked in. where into one on if here, that coming So particularly differently about leaning more personalization you wondering this you with before, of are Ron

switch day, that, foundation. we're It the our last Right. X not to fixing in in bank replatforming middle that's we're we're I quarter, e-commerce. -- the Well, our map It's a probably X-year bringing where was, and it's over to we're going was I business of first think the halfway road and -- that. big things We're a on through progress. mentioned last put

And so so little very far. I'd say

up lot you call all, more lot second the the made X.X business got couple making that, getting on in first years, and, fine targeting honestly. a And about foundation now. the we've the the but lot. think enhancements talking personalization time. better first the site then and got -- But lot the certainly spend we're small that. all, didn't We're of new -- If has doing every progress. we're first of We next X-star at of mobile we've the been right. on done we've of But third in rating, inning, I our a the on with and made north And sure things, it we're I to of the site of this would the e-com maybe on, improvements. time see the a we're getting focus and over site, of the inning to personalization a we

the follow-up. a very underdeveloped. you maybe talked And still When opportunity about international well and it's as

Is because countries a operationally lot of real a just resource annual maybe issue? estate it But not is it's a would So of now, ask. XX to to issue. estate to because I big imagine real you're that's openings, -- what's hindrance XX the human in purely getting it quality a

very we each Taiwan, next locations you It's have or the look find XX a issues. countries, a mean, it's combination Korea, if I estate a successful. where harder whatever, country, location to of from in say at would real just standpoint. some little I XX In

in now. have we Japan little where -- again, real of look And estate. a future you we've got bit opportunity, If XX-plus plenty it's but of

If the of you you over bring like of the at one able like It's new want be than or very challenges from more hands-on China places handful people the you existing ideally a -- locations Spain, is to operation. look a to in one.

I of first mentioned things XX first when positions promotions the supervisor felt we within unit opened and had we that buying think for there and one the we key just we Shanghai office the that is we even for in our people Taiwan warehouse. XX, success and interactions, move had in not from manager offices, at in the least but the

so it a experience. at takes And very hard it's a we're but but it little longer. -- hands-on And working

We'll with BMO take Bania Markets. our Kelly next Capital question from

Just on follow to Scott's of wanted up kind question.

kind And I more on well form just million per in the of think status and this a are the point. in of on your U.S. average club over of is self-cannibalization how that International. around curious are follow-up as need at well and many $XXX nearby. doing maybe some of sales clubs relief Canada the And in clubs and

next growth of Just that might think there are to the countries years, getting here? X disproportionately we maybe more the as any about X be

are or million million did another fiscal we million certainly, XX 'XX, one so first over [ them, the so a get $XXX huge $XXX million million. did that million million. sales. the something did $XXX-plus the they part [ like but numbers had that know was over Okay. and as in $XXX What $XXX did have numbers. of me, XXX we and the Those ] by in I question, front locations over don't ] few again? Average And I to or $XXX of way, of

growth looking front -- can And start at starts it a so to more $XXX market. we having to getting certainly generally, in that when to see X million, frankly, do of we want it, have it, starts cannibalize what and when in it to

that's bigger hopefully, more -- challenges of our so that our and each And we one of problems year. those have

that think So I will continue.

back look even you Again, that X, I volumes. little assume, if I we've think terms better ago, to whatever sales in than number want a assuming the inflation of years done X

that's Mexico. In X/X just few at in us -- under Japan, actually where locations low on have whatever, in XX-plus continue Canada so have well size And to. we XXX done in there's can is, have map a Australia we opportunity again, base certainly, we a U.K. a to where the and have and only we'll the that. Internationally, that are. looking of Spain. Certainly, We've it's We do news we good in for added think I'm of more X or of we there, markets the where that more so we XXs, there many population go something little X/X there's the locations. of

there in and this lot XX-plus wise Canada. not anytime Sweden Auckland, get Scandinavia new looking a host juncture. I'm buying like in all to have us years by managed U.K., we're country somewhat opportunities. by takes soon. case there suggesting of case somewhat countries, think like in Iceland We've that at we new XXX those a countries those and in the of by single Australia. the locations But for in It being we the XX. X/X of operationally of not done the It's going have Australia, And we're other are to few Auckland

We'll Ciccarelli take Truist. our with next question from Scot

about of your program, sales just your talked change betting at is this quarter, Number question that And on is, how having impact that, an aspect? vendors my operate two, So point, e-com of thinking bit what about kind guess program you Richard, Costco any quality control that big one? I of last number in Next. a related to on the

It's small sales. fact Well, sales our have in it's if sales, some first is, very the based And juncture, include can we like And market what of relative the our kind currently not at accounting where commission, those risk the what so you are items. rules will to in in commission is number. on it and it's in XP, that, -- the this all, of our a their Costco Next sales. of got company. still the -- at XP you more of juncture, But and value some just it's level rules sales you ownership --

In every items here We of that those. provide and we one way we same of items. each value, do and sense make we the a is every have to that it vetting are team terms that how vet want we -- vet,

I more up we'll current -- many and XX think as about there we're on about have XX certainly we forward. to suppliers go

a growing, gross time? be should margin, collecting that you you're over it's but So driver that commission, keeps small I presumably, margin XXX% presumably kind that's for natural just if right? if of program the now, know

yes. Much business. the like travel Essentially,

take our Melich from with ISI. We'll Greg Evercore next question

the in something you is to up keep single-digit high driving hike extra wanted in could And growth. much wonder have time. membership follow I does now that I don't we're else? increase the how Is mix waiting Executive fee that growth that as it and Richard, there what think you or on means and membership to it

sign-ups, look the would at and we look strong us. Again, to at it's look I that. strong strong all the ask if we if the question, what have at, are -- think I rates, just you would we renewal new want loyalty, variables

to do membership. we to we value little So longer it's a have Certainly, haven't the we a certainly question while needed We driven like providing value. feel think gone I the increase, is than average more we've extreme it.

if. my we of about at juncture, a answer, what use good pretty answer, question feel my But this standby I'll doing. not when, So we're it's

inflation, just on follow-up to right. a got that make I I sure want And

deflationary. that Did where Did you it You some are mentioned hardest out? Which stubborn we exit it X were ones inflation for X? trend categories of terms bottom? to said quarter. in it's X% to the the get near towards And

stubborn Which inflation -- which categories are inflation? in

Yes.

obviously. CPG,

All stuff? the branded packaged

There big wasn't a trend.

I end, at trend. the little think not it a than beginning, the lower was a but big

Okay.

it's we slightly still like X. not We're So exited positive.

the charge cost year. recognize, charge. to the an from Right. inventory X% fiscal is Right. the of X sales of The But LIFO is beginning

versus -- beginning year is X% -- from the ago. it's to of Now sorry, the X a I'm

Year-over-year? it. Got

Yes, yes.

renewal rate then Great. And the last, what is now? auto just

around it's U.S., the In XX%.

Parikh Rupesh from Oppenheimer. question We'll with take our next

operating So go I to want just expense growth. to

lap rate operating that that's the So expect Would high is within expense driving high. then growth? wage And increase? to item anything moderate you pretty unusual March growth growth still still that line once you

There's a unusual. lot not

extreme a very I creates inflation, had bit slight My gets gave more challenge, extreme a again, in of you the X% I of example. XX% more a to the X% -- got question I think stock and to and was involved, But hours you base. that And I decline at units, a it But that's the think more it that's sales labor [indiscernible]. when mean level. low XX,XXX-foot sales which is back right? you example to an little increase in overall, a extreme shelf.

of both COVID, the to able our ourselves X COVID, a those of going remember -- after us be was XX.XX% You also kind will through period year, of XX.XX%. we you get below of fiscal was before XX.XX%. it for was used And which that and X you of reported it year year. XX-month full the whole think percent XX, was for years. to XXXX, if SG&A for we month 'XX for remember, X.XX% And we fiscal of XX%. back for if it ever first all the will, in was quarter 'XX, back that an to to should that it at fiscal part first XXXX, In And XXXX, the

lot So we're lower even a including all ] higher we sales we just been and of at reported, of bit a that. historically, the [X.XX% still quite had that than things, a function productivity

we're think I well. So doing pretty

do we certainly, manage sales. more the that's how certainly driving biggest manage that? the challenge. do and to And way How think reduce we that is I

X question. then maybe just And Great. follow-up

feeling how about consumer. curious the healthier you're just So

to So this that hear past well TVs it quarter. was did interesting

asked we're through question, it when think answer I looking of all, first Look, that consumer we're here. we're to the rose-colored fortunate -- glasses somewhat at that

the convinced great it's been the site But that have think there's gotten We've I little improved website. the enjoyed communicating things value. got We've overall, we've few I it's again, and extra We've completely. not we've value. And a stuff, -- -- of We better think margin, done. on good we're a merchants.

people merchants lot, down can stuff. a we we've industry being in, great an buy when the bringing to shy new got have we something. think better done And of a driving still getting category we're that them a see of if -- job in not I chance

from TD our take Chen with Oliver next question We'll Cowen.

Nass Oliver. on is This Tom for

Just relative a of Kirkland trend the quick year. question on last to

how maybe supplier is ahead. Just stronger position this curious that can driving just could innovations? trending gross efficiencies you have us any for any then negotiations you essentially that's and Costco If remind if across categories. And margin callouts, if recent notable any

historically, ] relative It inflation X.X if non-gas lower the look, would get -- which about a when probably remember. a Well, means range, deals, percentage and I us And allowing points, was talked But think ago it you of [ biggest when X XX in basis think X, the And we was will, it in to has points the that I was increased we Signature Kirkland good been you penetration to is I say, Costco. we sales better to high-XXs. year. probably year XX year-over-year, at saw if X KS prices.

deflationary think level, not we've only that increases the -- the of certainly to and KS in some business. we're we're a We're with that with that stuff, more the only to but nonetheless, I to that we've maintained helps little bit -- think back buying the year, we're closer business. drive got customer we're can that yes item driving back still supplier. we seeing -- higher every I smaller and penetration But but

continues us. just it that think I work to So for way

follow-up notable quick on holiday shopping a this behavioral just then any trends season? in And you've Great. seen consumer

of volumes. And X in not COVID, now ways only we've fortunate But more that I the kind surprised in online said levels, buying add those of no, continuing increasing April those, the members thing basis. March, that to feel and the years, on many But we room -- my kind continuing happily benefited people so April we we're years actually think 'XX, in it to is that more mostly. no, about we're in again, regard. gold. colleague traffic of those an 'XX during the we call from benefited of I of drive that's think Some to to very X thing know they're March, we're We kept it,

not my of just here general, nonfood colleagues but only mentioned trends a signing getting that are better. on One stuff. merchandise discretionary in And big that's ticket little

my seasonally. think we've comment I corresponds that that earlier we with seasonal done -- feel good how about the

We'll Stifel. from take question Astrachan our next with Mark

those market branded I Kirkland has prices within the any able given extent suppose you How Have I mentioned. I notice trended that there, or products? more categories? seen how ask the versus wanted CPG guess lower on you happened. those deviation you're products, the you prices? has to on maybe Are CPG that, specifically you closer? pricing any on the has share changes to that to Do

on well. do allowed We've little ability some it's that -- slightly it's well in drives It's little some ability had is, frankly. a but a our -- it the new suppliers introductions CPG, more And to in value with to seeing as But in KS deflationary. which just more with think CPG deflationary the comment it's work item here. a us KS, stronger do I than side again, the to KS. our we're as -- room the KS to

amongst you rates cohorts just newer average? the Great. the And versus out question. call Anything terms the renewal last following memberships on then up of can in

was XX- ask it's whatever? Zs you millennials? are after At Generally seems spot. the same look going then after of don't how remember renewal at always or older we names, to the the the if get speaking, sweet rates. compare, end buy just cohorts, you the terms the if how new buy day, curve I younger Gen of XX-year-old next different when gen XX-plus members. years I of terms in about the they concerned. you, They go be they everybody as more whatever, in you ago, change getting know or you to would people less, the And into that

things our auto I we're better are renewal -- think think rates are overall the there. improving a probably Certainly, rates that doing as so frankly, helped well. job I like,

next our with Tarlowe from take question Jefferies. Corey We'll

recently. the could the be that of context ahead. to you as the I'm mentioned about your that about as wage get now you've wage increases Richard, curious further lower potential the that seeing increases inflation within taken you've taken you're thoughts deflation what well

So curious some about amid for to what structure volatility maintain margin nimble could the the side. ability maybe a pricing more be on Costco

every increases those much worker COVID. We year of certainly, the the half as with frontline in the wages as vacuum, over increases for do employee extent and getting a starting during March. we inflationary there's look increases do employees. Frankly, extra X,XXX more constant our you're we to the scale of initial and give on can or probably we at to we top which the go million getting look so less several our were premium to employees kept want of continue $X productivity in to And of there first But -- that that And new a significantly we are that that hours, pressures $XXX and -- at we'll able stronger about also down, wages. in things we afford then means it. half there, more. ] $X over they're [ sales we've Again, of a of there, like some talked of irrespective which the from kept that. But at XX,XXX are as independently To you little inflationary a we and them year. pressure from was now look benefited are we're

I wallet category? momentum in food to have driven may in of then that need-based that the perhaps you attribute And nonfood and that, some Understood. unlocked the of seen seen the and a of categories have you've difficult piggybacking effect and cause be off But that like relationship inflation think in fresh it a spend little may do moderating just we've and others? sundries to bit understand And to TVs the they this. like extra and categories

gas up can't week every with it hurt of top bit. down think prices That's fills come mind somebody their even have when tank. I little a

things those help. So

case macro but I think a it's that's part. on guess a basis, I'm the on sure our

our take question Dean with We'll Rosenblum Bernstein. from next

about. X really that debates big There's are clients us asking

things notoriously food toward shift margin, margins, the back for margin and like and versus impact particular, mix are marketplace fresh sundries. gross in and from lower appliances and TVs, First gross one a which gross the is least in potential at on

impact see mix big to you ticket discretionary bit, on do gross ticket food starting you a to from that discretionary? margins any the shift of back big from expect sort little sundries As and overall come away

-- and reality, it XX% marks of margin a to our to of it more X% XX%. margin, gross it's ranges thinking so of compacted -- things is X if In about from First theory, categories that range. than hover different retail very think lot traditional it, there's all, are up. much And what, the X% range XX% we retail. around things mean, I XX%, XX%. you in I'm below have, few traditional

it's don't always in a to as think And There's it's And And got say always something big always and those another saying so to I us you. there's it's mixture. of I it's you hurts of really that impact an it's all something. helps -- mix terms that changes. a thing

profitability about I relative a new wondering and internationally. could you themes was U.S. of contrasting of new speak versus that True. versus big And existing stores. stores then new profitability U.S. that's the then the to stores bit. sort other if existing is debate the X there. One of There's is relative

a the fixtures, lower United the of first it's equipment is you I. on at at and $XX I'm ago, building and ROI, was million an like shooting denominator all, the years to building on $XX hip million. typical from If building look -- States Well, $XX land when to property in I now the older XX million the million an here, $XX

there we I. look regions, in, lower get U.S. our units X come ROI regions, So you've the Canadian time. our start little up when got each But and over a generally a new of speaking, X of different at

remodeled the that The is those and the fact it. some matter of are the units have outliers because even of expanded is and I there. because and shine higher increase XX-years-old with XX- You'll through some really upgraded unit it volume we

to international I to that that an tend on some sales in little health The health membership care tends costs some some always, we've to these other there's a fact related dwarf even countries benefits. On a few other ROIs we're of U.S. to in of related in. that that be because than be combination little to things these very wages benefits, standpoint, gross even and fees, the different higher. talked country about a higher some the margin, to countries think, related -- some return related more every

We'll take Feldman Advisory our Telsey next with Group. question from Joe

like ask how to think first high seems Executive about it you continues on And I XX%? Wanted member like natural like wondering guys penetration mean to level where But go that. beyond presumably, you member. that the inch just of And an how was to you there higher. is be? want kind a here be I should everybody still from think Executive it can

think I -- always well, we there's going be or add. X to another country

there's in view, certain warehouses it country. You XX so done we've always number. In or need our after the a

think some So of of little we've -- getting I several line it no, the one done as it you in things last in as drove better to when few the renewal. a one, last that But well to kind that selling job years, that years it auto like up the you the asymptotic a bit. increase to of -- of add will it's

renewal. -- opt When doing doing and come to up their now card signing they're they -- out in want debit or they credit in can up online they sign people in put online, there opt or to to it can other

come wonderful. things it But time. I think still so bit it along So probably that think with have over slow of a being increase see us up rate little will but those you'll I pushed

anything Got obviously, about in forward we you're on think when that guys I at shrink on And goods, walk even just with making shrink? follow-up. cards to shrink sure about when showing receipts. with there And they should maybe a are regard know with going I one know point. members their recent your guys talk the down issue checking an But store. your trends? was Anything and to leave quick it, you Because And then for cracked you have you okay.

about Maybe the you latter paper, I very of, what that the start we recent at basis saw more as nothing went really the It's then into upward couple of point self-checkout was years a think a well. about last things points combination in basis less perhaps -- we number impacted all. of Thankfully, over read get and as low we by some already talked a we with. to delta on several

So we're fortunate in that regard.

next take with from question Capital. Champine We'll Loop our Laura

improvement, like just on ancillary I'm where the I wondering mostly into line, in dig wages more profit little I of operations from. that. wondering bit that numbers and come drove from that's SG&A what to the come column. wanted didn't And on it sounds you're think -- where pressure those did some it I'm in a The

Yes.

The little combination sense ancillary neighboring competitive in with improved have the and to number margins and last because making see it's our thing at gas gas than more. increased on make every our our years, seen. of which about that operate competitive -- is stations, there what last we a we're has weekly increased and we able to and gas, ever value shops everybody e-com the do X sales others we've profitability are X or price think out gas gas few more, a found per is but within X of to increasing gas When it's proposition not the stations gallon do businesses. years we we I last gas is profitability allowed actually we've On those over in stations, line, penetration improved been just quarter

will, if for a, win-win you been that's us. a So

e-comm the in the more as there sales margins I On helped think has well. side, driving us

operations then front... the just on And

Yes.

They get pointed while distinct there call, is increases, significant as think I we sales line basis points, from of pointed half employees wages, the well, March, relative increases it total out have basis of X an like. significant the top points we on items our or X the the are lower rest you energy all that's of so out over On those figures. -- mean, costs in like other I like like to increase other scale. every when and I do the was

it. Got

coming those just you not X wages, is probably pressure of most the had? discrete So callouts from

have half. figures It's with don't me. the more exact than I

at questions are like no for time. the any further there Richard or remarks. And turn closing additional call back to this to I'd over Galanti

a holiday. this thank thank is of We're you, Well, have I questions around this to Lisa, and call. time on and everyone, the And happy you, think call. a record finishing answer

holidays. So much. the enjoy Thank you very

Thank you conclude you. today, presentation. does may disconnect. you for Thank your now that And and participation the