Costco’s sales rose 9% in the most recent quarter, reassuring observers that while consumers may be holding back at many retailers, they’re still hungry for great deals. And it is introducing a new telehealth service, with basic care visits starting at $29.
The Issaquah, Washington-based company says sales in its fiscal fourth quarter climbed to $77.43 billion, compared with $70.76 billion in the comparable period last year. Net income advanced to $2.16 billion from $1.87 billion in the year-ago period.
Those gains topped Wall Street expectations. And while slower than the fast growth the company has experienced over the past several years, they indicate that -- even as many shoppers are cutting back -- Costco’s members are a resilient crowd.
The company did note pullbacks in big-ticket items.
“Despite operating amid an uncertain economic backdrop, we surmise Costco boasts an enviable industry position given the retailer’s enticing value proposition and resounding customer base,” writes Noah Rohr, an analyst who covers Costco for Morningstar.
This quarter, that solidity shows up with impressive loyalty, with the retailer’s renewal rate exceeding 90% for the second straight year. This fiscal year, it added 4 million members to reach 71 million. The number of those holding executive membership, which costs $120, compared to the $60 basic membership, is now more than 32 million.
The company also announced an expansion of its healthcare offers, teaming up with Sesame to provide $29 telehealth primary care visits in all 50 states. In addition to that discounted price for Costco members, the partnership includes health check-ups, including a standard lab panel and virtual follow-up consultation for $72, virtual mental health therapy for $79, and a 10% break on Sesame’s other services, including in-person appointments.
The offer puts Costco in competition with other retailers trying to build their outpatient health businesses, including Walmart, CVS, Walgreens and Amazon.
Sesame, which does not accept insurance, says its business model differs by using marketplace dynamics with providers around the country, who compete to serve patients. Sesame boasts that the majority of appointments are scheduled within two hours.