CFO Richard Galanti gave an update on inflationary pressures as Costco Wholesale's revenue and earnings-per-share came in below estimates for the first quarter of fiscal 2023.
We estimate the equivalent year-over-year price inflation number in the range of 6% to 7% in the first quarter. He said that the company's inflation was a little better than a quarter ago. Commodity costs are mostly coming down, whether it's corn, flour, sugar and butter or even some things like steel. We're seeing a little bit of a trend, but we'll keep you posted. A few things are up, but we're seeing a bit of a trend. The retailer said that it generated $54.44 billion in total first-quarter revenue, a 7.5% increase from the $50.36 billion reported in the same three-month period last year. Its adjusted earnings-per-share came out to $3.10 for the quarter, as its net income widened to $1.36 billion.
In the quarter, Costco saw revenue increase from net sales and membership fees, with it's net sales rising by about 10% to $53.44 billion. Membership fees generated $1 billion, up from $946 million in the first quarter of last year.
In November sales, Galanti said that big ticket discretionary has a bit of weakness. He said that profits from gas sales have helped Costco hold prices where we can on some things. He pointed out fresh foods as an example of where the company has held the price points on items, including some proteins and baked goods, despite inflation.
He said the company saw strength in canned protein last quarter. He said that Costco doesn't think there is currently a lot of trade down on fresh.
While on the call, he also answered analyst questions about whether Costco will raise the price of membership fees, at one point he said he d be coy on when that might be. There is no rush with the headline being the recession question mark and inflation exclamation point. He said that five years and seven months from June 17 is January of 23 even if we follow the pattern of the last three fee hikes over the last sixteen or so years. On the last call I said that doesn't mean it's going to be January 23. It is a question of when, not if, but we ll just have to wait and see at this junction. He said Costco feels very good about our member loyalty and strength. If we wanted to do it yesterday, we could, and if we want to do it six months from now, we can, he said. We'll wait and see.