Costco Prices Going Up: If You’re A Customer, Here’s What You’ll Pay In 2017

Costco has not been doing well on Wall Street, and those troubles have trickled down to the average Costco customer, as the company announced Thursday it would raise its membership fees starting in June.

Beginning June 1, individual members of the wholesale warehouse in the U.S. and Canada see their annual fees increase from $55 to $60. The same change applied to business cardholders. The membership fees for executive members will increase from $110 to $120. These changes will affect about 35 million Costco customers, half of whom were executive members.

The reason for the fee increase? When Costco released its quarterly results Thursday, those numbers were below expectations. In the report, the company stated its net income for its fiscal second quarter was $515 million. In other words, that meant Costco shares on Wall Street were worth $1.17 each. Analysts from Zacks Investment Research had expected those shares to be worth $1.35.

Plus, Costco’s total revenue for that second quarter period was lower than expectations. The company’s revenue of $29.77 billion came in below the $29.99 billion set by Zacks analysts. After the report was released, Costco’s shares fell more than 4 percent in after-hours trading.

Still, the change in membership was actually expected by Wall Street analysts. The company has generally increased its fees every five to six years, and the last change came in 2011. In addition, the financial services company UBS predicted earlier this week that customers wouldn’t necessarily be scared off by the increase in membership fees.

Costco, the second largest retailer in the U.S. behind Wal-Mart, has nearly 90 million card-carrying members. They spent $2.6 billion in membership fees in the fiscal year 2016, which accounted for the majority of its $3.6 billion operating income.