Costco raised its annual membership fees by $5 for non-executives and by $10 for executives in the United States and Canada. That sets the new rates at $65 per year for non-executives and $130 per year for executives.
The change was effective September 1 and impacts around 52 million memberships, Costco said in a statement. Costco has traditionally raised its membership prices by $5 to $10 every five-and-a-half years, so the latest increase should not come as a shock to members since the last increase was in June 2017.
Additionally, management has been clear about its plans to raise membership fees. On its conference calls in December 2023 and March of this year, Costco’s chief financial officer said the fee increase was a matter of “when, not if.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The new Costco fee for non-executive memberships in the U.S. and Canada will be $65, up from $60. Executive membership fees will be $130, up from $120, which consists of the $65 primary membership fee plus the $65 Executive upgrade.
In addition, the maximum annual 2% reward associated with Executive memberships will increase to $1,250 from $1,000.
For comparison of Costco vs Sam's Club, Sam's Club membership is $50. But if you know the secrets to shopping at Costco, you can find ways to make up that $15 annual difference.
Costco stock reacts to the announcement
Costco (COST) stock is up nearly 36% year-to-date and analysts are bullish on the stock going forward. According to NASDAQ, the consensus recommendation among analysts it tracks is a Strong Buy, based on 30 analysts.
Analysts’ price targets have moved up with COST’s run higher. Shares are up nearly 36% in 2024 and over 69% in the last year. Currently, the average price target is $924.55, representing implied upside of just over 4% to current levels.
Financial service firm Oppenheimer is one of the more bullish outfits on COST stock with a Buy rating and a price target of $925. The price target was initially higher at $950 in July, before being lowered to 925.
Oppenheimer continues to "see improvements in the quality of Costco's treasure hunt from stronger brands in apparel/consumer durable offerings to a more powerful assortment of discounted gift cards in store," analyst Rupesh Parikh said in an August 27 note, as per Yahoo. "Against a mixed discretionary backdrop lately, we believe this has contributed to a meaningful improvement in non-foods category trends and the company's standout performance."
Oppenheimer’s $925 price target implies upside of about 3% to current levels.
Related Content
-
Can the 'Guardrails Approach' Protect Your Retirement Investments?This investing method helps retirees avoid running out of money, even in a highly volatile market.
-
Social Security Is Taxable, But There Are WorkaroundsIf you're strategic about your retirement account withdrawals, you can potentially minimize the taxes you'll pay on your Social Security benefits.
-
Walmart Week 2025: Exclusive Perks and Deals for Walmart+ MembersWalmart+ Week runs April 28 –May 4 with fuel savings, free express delivery and six months of Paramount+ with SHOWTIME. See all the perks.
-
How to Make Changing Interest Rates Work for Your RetirementHigher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
-
Four Reasons It May Be Time to Shop for New InsuranceYou may be unhappy with your insurance for any number of reasons, so once you've decided to shop, what is appropriate (or inappropriate) timing?
-
How to Put Together Your Personal Net Worth StatementNow that tax season is over for most of us, it's the perfect time to organize your assets and liabilities to assess your financial wellness.
-
Bouncing Back: New Tunes for Millennials Trying to Make ItAdele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
-
What Are AI Agents and What Can They Do for You?AI agents promise to be the next big thing in artificial intelligence, but what exactly do they do?
-
Should You Buy an iPhone Now Before Tariffs Hit?Looming tariffs can make an iPhone purchase seem urgent. Here's what to do if you need another phone but want to save money.
-
Here's When a Lack of Credit Card Debt Can Cause You ProblemsUsually, getting a new credit card can be difficult if you have too much card debt, but this bank customer ran into an issue because he had no debt at all.
