Costco Raises Membership Fees

Plus, ON Semiconductor downgraded.

July 11, 2024

Today is Thursday, July 11, 2024.

The Early Bird Index today is 75.93.

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Costco Raises Membership Fees

Good news for investors of Costco (Nasdaq: COST) and bad news for consumers. The retail giant is finally raising membership fees, causing the stock to jump by 2.53% in after-hours trading on Wednesday.

Details: Costco will hike its membership fees by $5 for U.S. and Canada Gold Star (individual), Business, and Business add-on members, for a total annual fee of $65 starting September 1. Annual fees for executive memberships will also go up.

Also: Costco announced that June sales increased 7.4%, including an 18.4% jump in e-commerce sales.

Background: The company has been toying with raising its membership fees for some time. Investors finally got their wish.

Early Bird’s Nest Egg Gains: It might only be a $5 fee hike, but the additional revenue is critical for Costco.

  • The fee hike allows Costco to boost revenue while keeping prices competitive to retain customers. It also helps offset rising costs due to inflation.

  • Rival Sam’s Club raised membership fees in 2022.

  • Costco typically raises fees every five years. It hasn’t done this since 2017.

Final Thoughts: Costco, up 35% this year, reports earnings in September.

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Notables

Notable Earnings Today: Delta Air Lines (NYSE: DAL), PepsiCo (Nasdaq: PEP), Conagra Brands (NYSE: CAG), Bank7 (Nasdaq: BSVN).

Notable IPOs Today: VictoryShares Hedged Equity Income ETF (Nasdaq: HEJD), CoreCommodity Natural Resources ETF (Nasdaq: CCNR).

Notable Equity Crowdfunding Campaigns Ending Today: Biochar Life (Wefunder), Let’s Talk Money 2nd Channel Drop (GigaStar).

Notable Economic Events Today: Jobless Claims (8:30 a.m. ET), Consumer Price Index / Core CPI (8:30 a.m. ET), Federal Budget Balance (12:00 p.m. ET).

ON Semiconductor Downgraded

Shares of ON Semiconductor (Nasdaq: ON) fell 2.79% in after-hours trading on Wednesday due to a downgrade.

Details: Morgan Stanley (NYSE: MS) downgraded the semiconductor supplier to 'underweight'.

Background: Due to an industry-wide slowdown and increased market saturation, ON Semiconductor has struggled this year. About 1,000 employees got laid off from the company in June.

Final Thoughts: The stock is down nearly 6% this year. Among all the semiconductor stocks, it’s tough to trust this one.

WD-40’s Record Sales

Household product manufacturer WD-40 Company (Nasdaq: WDFC) jumped 12.49% in after-hours trading on Wednesday after posting good financial earnings results.

Financials: WD-40 reported earnings of $1.46 per share in the past quarter and revenue of $155 million; both were better than expected.

Quote: “We delivered another strong quarter with record sales driven by robust volume growth across all three of our trade blocs.” - Steve Brass, president and CEO.

Final Thoughts: WD-40 was down 8.96% this year before the results.

Jerome Pivots: What’s Behind Powell’s Latest Shift on Rates (Wall Street Journal)

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