Costco ecommerce sales decreased 9.6% year over year in the second fiscal quarter, and 6.8% year over year in the first half.

Costco Wholesale Corp. reported that for its second fiscal quarter ended Feb. 12, ecommerce sales were down 9.6% from the year-ago quarter. For the first half of the fiscal year, Costco ecommerce sales decreased 6.8%.

Chief financial officer Richard Galanti said in a March 2 call with investors that the retailer’s “online mix of sales” drove the weakness. 

“Big-ticket discretionary departments like majors, home furnishings, small electrics, jewelry, hardware — these were down 15% in the quarter and make up 58% of our e-com sales,” he said. “These same departments, by the way, were down 11% in warehouse but only make up 8% of total warehouse in-line sales.”

Costco ranks No. 9 in the Top 1000. The Top 1000 is Digital Commerce 360’s database of the largest North American online retailers by web sales.

Costco Q2 sales

The retailer reported net income for its fiscal second quarter of $1.46 billion. That’s a 13% increase year over year.


Costco net sales for its second quarter increased to $54.24 billion. That’s up 6.5% from $50.94 billion in the year-ago period. Comparable sales in the United States grew 5.7%. For the total company, comparable sales grew 5.2%. 

Galanti said the retailer’s average order value increased 0.2% worldwide and 1.9% in the U.S. Its membership renewal rate in the U.S. and Canada grew 0.01% to 92.6%. It also grew 0.01% worldwide, to 90.5%. 

Membership growth remains strong, Galanti said. Costco ended its second quarter with 68.1 million paid household members and 123.0 million cardholders, he said. Both memberships and cardholders had more than a 7% year-over-year increase.

Executive members now comprise 45% of paid members, he said, and about 73% of sales worldwide. Executive membership is higher-cost loyalty program ($120/year) Costco offers. Galanti said Costco had 30.6 million paid executive memberships at the end of its fiscal second quarter. That’s up 630,000 from the end of its fiscal first quarter, he said. The other membership is its Gold Star ($60/year), which has fewer perks for shoppers.


Warehouse expansion

Costco opened three warehouses in its fiscal second quarter, Galanti said. Two are in the U.S. and one in Australia.

Next week, he said, Costco will open its third warehouse in China. The retailer plans to later open its fourth and fifth warehouses in China, he said. Furthermore, Costco plans to open 27 warehouses total in its fiscal year 2023, including three relocations. Of the 24 entirely new Costco warehouses, 14 will be in the U.S. The 10 international warehouses include the three in China as well as the first Costco locations each in New Zealand and Sweden, both of which Galanti said the retailer opened in its fiscal first quarter.

Costco ecommerce sales

The drop in Q2 ecommerce sales was a stark contrast compared to what Galanti shared during the company’s fiscal first quarter call with investors in December 2022. Galanti said on the call that, subsequent to Q1, the retailer had its two largest ecommerce-selling days in company history: Black Friday and Cyber Monday.

Although Costco provided percentages of its year-over-year ecommerce sales decline, it did not break out dollar amounts or ecommerce penetration of total sales.


Costco Q2 2023 earnings summary

For the fiscal second quarter ended Feb. 12, 2023, Costco reported:

  • Total Costco sales increased 5.2%.
  • Net sales increased to $54.23 billion from $50.93 billion in the year-ago quarter.
  • U.S. sales increased 5.7%.
  • Costco ecommerce sales decreased 9.6%. 
  • Membership fees increased to $1.02 billion from $967 million in the year-ago quarter.

For the fiscal first half ended Feb. 12, 2023, Costco reported:

  • Total Costco sales increased 5.9%. Net sales increased to $107.67 billion from $100.35 billion in the year-ago period.
  • U.S. sales increased 7.5%.
  • Costco ecommerce sales decreased 6.8%.
  • Membership fees increased to $2.02 billion from $1.91 billion in the year-ago period.

Percentage changes may not align exactly with dollar figures due to rounding.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

Follow us on LinkedInTwitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.