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Costco disappoints on earnings, raises membership fees

Myles Udland
Markets Reporter

Costco (COST) is raising membership fees.

On Thursday, the wholesale retailer announced it would raise the price of its Goldstar membership by $5 per year to $60. Its Executive membership fee will rise by $10 a year to $120.

These new fee increases will be effective June 1, 2017. Costco last raised membership fees in November 2011.

In a note to clients earlier this week, analysts at UBS speculated the company could raise its membership fees in the second quarter. This forecast turned out to be dead on.

A Costco Wholesale retail club is photographed in Austin, Texas, U.S. on December 12, 2016. REUTERS/Mohammad Khursheed

Elsewhere in Costco’s release, the company reported earnings and revenue that both missed expectations.

Earnings per share came in at $1.17, below the $1.36 expected by Wall Street analysts. Revenue came in at $29.13 billion, below expectations for $29.86 billion.

Same-store sales were also a disappointment, rising 3% against expectations for a 3.5% increase. Same-store sales in the U.S. were up 3% during the quarter and were up 8% in Canada during this period, thought other international same-store sales fell 2%.

In its note ahead of earnings, UBS said that Costco could be impacted by the delay in processing tax refunds, an issue Yahoo Finance highlighted as a potential negative for retail sales in early February.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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