USA- In his first earnings call, Costco’s newly appointed CFO Gary Millerchip announced the wholesale giant’s net sales increased by 9.1% to US$57.4 billion for the company’s third-quarter ending May 2024.
The new CFO attributed the strong performance to increased demand for discretionary items and increased e-commerce sales.
The company reported a 32% increase in app downloads and a 20.7% increase in e-commerce sales. Its logistics wing also reported a 28% increase in deliveries. Millerchip listed silver sales and golden bars as prime drivers of this enhanced performance of its e-commerce wing.
Although the wholesaler’s e-commerce wing accounts for only 10% of the company’s sales, the new CFO expressed confidence in the potential of the company’s e-commerce business.
Millerchip said, “We believe there’s a lot more opportunity to grow digital. I have experience in those areas and would hope that I can bring some of that to help us continue to evolve, but very much in the Costco way.”
Analysts have attributed this shift in Costco’s digital earnings to Millerchip’s increased focus on developing the company’s digital presence and e-commerce, a focus analysis attributed to his 15 years of experience working for Kroger.
The new CFO piloted a program allowing shoppers to buy products online and pick up items in warehouses aided by its Innovel Solutions logistics firm acquired in early 2018. The program is a reflection of the company’s expansion of its digital capabilities.
The new CFO also helped expand the company’s ecommerce wing through its partnership with Uber technologies that helped improve deliveries. His ecommerce enhancement efforts have been praised by analysts in the retail sector.
Peter Benedict, an analyst with Baird Analysts, said, “With CEO Ron Vachris and new CFO Gary Millerchip anchoring the call, the voices were different, but the message was the same: COSTCO’s member-focused/value-driven flywheel continues to take share on multiple fronts, and the company is increasingly leveraging tech/data to enhance it’s already considerable competitive advantages.”
Analysts have predicted the company’s continued strong performance, spearheaded by its competitive pricing strategy and continued growth of its e-commerce wing.
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