When you think of retailers that are poised to do well in just about any economic climate, Costco tends to come to mind.

The past year has been pretty brutal for the retail industry on a whole, with many big names missing on earnings in recent quarters.

Costco, meanwhile, recently reported on earnings for its fourth fiscal quarter of 2025. And it had some impressive results to share.

On a year-over-year basis:

• Net sales rose more than 8%
• E-commerce sales increased 15%
• Net income rose 11%
• Membership fee income increased 14%

The latter figure is pretty impressive, given that Costco increased its membership fees last September. The cost of a basic Gold Star membership went from $60 to $65 a year, while the cost of an Executive membership went from $120 to $130.

Membership fee revenue is extremely valuable to Costco, allowing the store to accept lower margins on the products it sells by making up the money elsewhere.

As CrossDock Insights writes, “This revenue is especially important because of its pure margin – there’s no cost of goods sold, no inventory to manage, and just high-margin, recurring income.”

Costco gives members a reason to keep paying

There are plenty of stores that allow you to walk in the door and shop to your heart’s content without having to shell out a membership fee. 

But there’s a reason Costco members keep joining or renewing – they clearly see the value the warehouse club giant has to offer.

Costco members get to enjoy benefits that include:

• Big savings on bulk purchases
• Access to low-cost member services, from new tires to home installation
• Unique Kirkland products that are high in quality
• Convenient, affordable travel packages
• One of the most generous return policies in all of retail

But Costco doesn’t tend to grow complacent when it comes to the member experience. Rather, the company’s management team is constantly looking for ways to offer members more value.

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Part of that includes sourcing unique products to make the shopping experience more fun.

Costco’s management team often jokes about the treasure hunt aspect of visiting the store. But it’s the attention to detail the company’s buyers put into inventory that encourages customers to spend more of their money.

Costco is also constantly evaluating its policies to make sure they’re serving members’ needs. And a recent policy change has made shopping at Costco even easier and more convenient for members.

Costco quietly extends store hours

Earlier this year, Costco made the decision to extend its gas station hours. And at the time, CEO Ron Vachris said the company was considering extending warehouse club hours on a whole.

More recently, Costco brought back early shopping hours for Executive members. The decision, though controversial, wound up having a hidden benefit – fewer crowds and a more pleasant shopping experience for members across both tiers.

When that change was announced over the summer, Neil Saunders, Managing Director of GlobalData’s retail division, said, “The earlier hours add another benefit to the Executive tier of the membership program. Yes, it may cause a little confusion (and even resentment), but it may also encourage some people to trade up to a higher tier.”

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It was unclear at first whether the extended hours would have a positive impact on Costco sales. But during the company’s most recent earnings call, Vachris confirmed that thanks to that change, sales were most certainly up.

However, Vachris also revealed that in addition to adding early shopping hours for Executive members over the summer, Costco made another quiet change – adding an additional shopping hour for all members on Saturday evenings.

Those changes, combined, had a very strong impact.

“To increase value and convenience for our members, on June 30, we added executive member exclusive operating hours in the mornings and additional hours on Saturday evenings for all members in our U.S. warehouses,” Vachris said. “We estimate these incremental hours have added about 1% to weekly U.S. sales since implementation.”

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Vachris also added that the Saturday evening hours, though introduced without much fanfare, have been “very well received by our members.”

If that trend continues, Costco may opt to further expand warehouse club hours to both benefit members and boost its bottom line.

Maurie Backman owns shares of Costco.

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