FX168 Financial News (North America) News As the price of gold continues to soar, Costco (COST) is selling off large amounts of gold bars.

Costco chief financial officer Gary Millerchip told analysts during an earnings call on Thursday night (September 27) that gold sales increased by “double digits” in the most recent quarter. Millerchip went on to add that gold was a “meaningful tailwind” for e-commerce sales this quarter.

Costco began selling gold bars in fall 2023. Wells Fargo analysts estimate that Costco sells $0.1 billion to $0.2 billion in gold bars each month.

Greg Melich, senior Evercore ISI analyst, asked executives, “Given the success in the non-food sector... I'm just curious, are there any plans to bring the Kirkland Signature to the credit card market?

Kirkland Signature is Costco's large private label enterprise.

“There are no plans right now,” Costco CEO Ron Vachris said.

(Photo credit: Costco)

Costco's gold rush comes as metal futures hit a record high of $2,708.70 an ounce during Thursday's trading session. Since the beginning of the year, gold has risen 30%. The Federal Reserve decided to cut interest rates by half a percentage point last week, once again boosting gold.

Top gold stocks such as Freeport McMoRan (FCX) and Barrick Gold (GOLD) rose 22% and 18%, respectively, in 2024.

On their website, the total number of units per membership is limited to 5. Professionals say Costco's gold business is likely to remain profitable in the short term.

IDX CIO Ben McMillan told Yahoo Finance this week that after years of “sleeping,” gold is now fully committed as investors look to reduce risk in their portfolios.

“Historically, gold has always been... somewhat related to very risky, very safe haven transactions, such as a hard landing in an economic recession.” McMillan said.

Despite high gold sales, Costco's bread and butter are still peddling products like bread and butter to cost-conscious shoppers.

Same-store sales for the fourth fiscal quarter increased by 6.9% compared to expectations of 6.4%. E-commerce sales increased 19.5%, slightly lower than Wall Street's forecast growth rate of 19.63%.

Sales were driven by growth in products such as appliances, food health and beauty aids, tires, toys, and gift cards.

Costco's shares fell 1.5% in Friday's pre-market trading.

“Overall, we think strong comparable sales and membership growth, as well as solid member retention rates, indicate that the company's value proposition remains attractive, and the share of most of the company's businesses is growing strongly. We anticipate that the recently announced increase in membership fees will largely be reinvested to further help grow sales, competition, and traffic over the next 12-18 months.” Stifel analyst Mark Astrachan wrote in a client note. Astrachan maintains a buy rating on the stock.