Warehouse giant Costco is cashing in on the gold rush, with sales of the precious metal surging double digits in the latest quarter. According to CFO Gary Millerchip, gold has become a significant contributor to the company’s e-commerce sales, which jumped 19.5% during the period. The retailer began selling gold bars in the fall of 2023, and analysts estimate it’s now moving $100 million to $200 million worth of gold every month.
As gold futures hit record highs, reaching $2,708.70 an ounce, investors are flocking to the safe-haven asset. Year to date, gold has gained an impressive 30%, with top gold stocks like Freeport McMoRan and Barrick Gold rising 22% and 18%, respectively.
Costco’s online store offers a 1 oz gold bar for $2,679.99, but you need to be a member to buy it, and there’s a limit of five units per membership. The company has no plans to introduce its popular Kirkland Signature brand into the gold bullion market, according to CEO Ron Vachris.
Experts believe the gold rush will continue to benefit Costco in the near term. Ben McMillan, CIO of IDX, notes that gold is now firing on all cylinders as investors seek to de-risk their portfolios. “Gold historically has been associated with very risk-off, very flight to safety type trades like hard landing recessions,” McMillan explains.
While gold sales are booming, Costco’s core business remains strong, with fiscal fourth-quarter same-store sales growth coming in at 6.9%. The company’s value proposition continues to appeal to cost-conscious shoppers, driving sales growth in appliances, food, health and beauty aids, tires, toys, and gift cards, among other items. Despite a 1.5% dip in shares on Friday, analysts remain bullish on the stock, citing strong comparable sales and membership growth.
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