Costco (NASDAQ:COST) is the latest company to crack down on membership sharing. Netflix made headlines when it committed to cracking down on widespread account sharing on its streaming platform in early 2023. This strategy worked out extremely well for Netflix, which added 8.8 million subscribers over the period stretching from July 2023 through to September 2023. That jump put Netflix at 247 million worldwide subscribers at the end of October 2023, greatly surpassing analysts’ expectations.
For its part, Costco has tested new scanners that will aid in its crusade against account sharing. Costco members have had to flash their membership cards for employees in to gain access to the store up until this point. Households are permitted to receive one extra membership card, but memberships are non-transferable.
The new strategy aims to combat membership sharing by asking shoppers to scan their membership cards at the entrance to the store. In the summer of 2023, Costco asked shoppers to present photo identification along with their membership cards at self-checkout registers.
This company released its first quarter (Q1) fiscal 2024 earnings on December 14, 2023. Costco reported net sales of $56.7 billion in Q1 FY2024 – up 6.1% compared to Q1 FY2023. Meanwhile, the company delivered net income of $1.59 billion or $3.58 per diluted share. That was up from $1.36 billion or $3.07 per diluted share in Q1 2023. The board of directors announced a special cast dividend on Costco stock of $15 per share, payable January 12, 2024.
Investors will want to watch Costco’s operations closely as it rolls out this strategy.
