Friday, May 31, 2013

Costco Earnings Call-May 30, 2013

First, let me say, I'm no stock analyst, no expert in retail, and have no relationship with Costco other than as an unpaid blogger.

Even with no particular expertise, the Costco investors call with Richard Galanti yesterday was fascinating.

Currently, there are 636 stores, with 452 of those in the US.  80% of sales are in the US; 90% of Executive Members are in the US.  It sounded to me as if Executive Membership is an option in the US only (and perhaps Canada), but that this may change in the future.

Of the marketing, ultimately, it's an art form, with Costco finding it's usually worse to have too many choices than too few.  Costco has found it better to have one choice (for instance, in portable phones) than six.

The % of SKU (product) that are Kirkland store brand is in the 20's and growing.  Costco plans to grow that segment of the business by picking low hanging fruit-for instance the women's athletic wear I blogged about earlier, which has been very successful. They have no plans to sell their own brand of consumer electronics at this time.

You will eventually be able to hear the entire call by going to the Costco webpage and clicking on investor relations on the lower left side.

No comments:

Post a Comment