Costco saw its shares rise by 2.5% in extended trading on Wednesday following the announcement of its first membership fee increase since 2017 and a notable uptick in sales for June. Effective September 1, membership fees will climb to $65 for regular members and $130 for executive members, marking an 8% rise from the previous rates of $60 and $120. This fee adjustment will impact approximately 52 million memberships across the U.S. and Canada, with about half of these belonging to the executive category.
During its latest quarter, Costco reported that membership fees contributed $1.1 billion, accounting for roughly 2% of its total revenue, which reached $58.5 billion. Additionally, the retailer disclosed that its net sales for June totaled $24.48 billion over a five-week period ending July 7, reflecting a 7.4% increase from the $22.78 billion reported in the same period last year. This performance underscores the enduring appeal of Costco’s business model, which focuses on offering a broad range of bulk products at competitive prices, even amid inflationary pressures.
Investors have taken note of Costco’s ongoing long-term uptrend. This upward trajectory has been evident since the 50-day moving average crossed above the 200-day moving average in May of last year, forming a bullish golden cross signal. More recently, the stock’s gains have accelerated following a pullback to the 50-day moving average. Earlier this month, Costco shares broke out from a pennant pattern, suggesting the continuation of the current upward trend.
With Costco shares trading near their all-time high, investors are keeping an eye on key levels using the measuring principle, which projects potential future price targets. By calculating the distance of the uptrend preceding the pennant pattern and adding it to the breakout point, a forecast price target of $1,032 emerges. This projection indicates a potential area on the chart where the stock may encounter additional selling pressure, particularly if other indicators signal overbought conditions.
In after-hours trading on Wednesday, Costco shares reached $906.70, marking a 2.5% gain.
