Costco Wholesale (COST) Q1 2025 Earnings Call Transcript

Costco Wholesale (COST -0.63%)
Q1 2025 Earnings Call
Dec 12, 2024, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, and thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Costco Wholesale Corporation first quarter fiscal 2025 conference call. All lines have been placed on mute to prevent any background noise.

After the speakers’ remarks, there will be a question-and-answer session. [Operator instructions] Thank you. And I would now like to turn the conference over to Gary Millerchip, chief financial officer. You may begin.

Gary Millerchip — Executive Vice President, Chief Financial Officer

Good afternoon, everyone, and thank you for joining Costco’s first quarter 2025 earnings call. I’d like to start by reminding you that these discussions will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause actual events, results, and/or performance to differ materially from those indicated by such statements. The risks and uncertainties include, but are not limited to, those outlined in today’s call as well as other risks identified from time to time in the company’s public statements and reports filed with the SEC.

Forward-looking statements speak only as of the date they are made, and the company does not undertake to update these statements, except as required by law. Comparable sales and comparable sales, excluding impacts from changes in gasoline prices and foreign exchange, are intended as supplemental information and are not a substitute for net sales presented in accordance with GAAP. Before we dive into our financial results for the quarter, I’m delighted to say that Ron Vachris is joining us for today’s call. I’ll now hand over to Ron for some opening comments.

Ron Vachris — President and Chief Executive Officer

Thank you, Gary, and good afternoon, everyone, and thank you for joining us today. As we wrap up the first quarter of fiscal 2025, let me make a few brief comments on some of the highlights since we last spoke in September. In the first quarter of fiscal ’25, we opened seven new warehouses. This included one relocation and resulted in six net new buildings, of which four were outside of the U.S.

Additionally, after the end of the quarter, on the day before Thanksgiving, we opened our 897th warehouse in Pleasanton, California. That opening had the highest-ever opening day sales for a U.S. warehouse at $2.9 million that day. We continue to project 29 openings during fiscal year ’25, of which three will be relocations and so 26 net new buildings.

Ten of those warehouses will be outside of the U.S. Gary will speak to a more detailed review of our results in a few moments, but I wanted to share some fun facts regarding our growth across the business. Our U.S. bakery division has reached new records of 4.2 million pies being sold the three days prior to Thanksgiving.

In our U.S. food courts on Halloween Day, we set a new record of 274,000 whole pizzas being sold. That was an increase of 21%. Our U.S.

pharmacy business has prescription growth exceeding 19% for the first quarter, setting new volume records for that business. And lastly, we continue to gain market share with our e-commerce big-and-bulky fulfilled by Costco Logistics. Costco Logistics completed nearly 1 million deliveries in Q1 and over 196,000 deliveries last week alone. That was a new record as well.

The majority of these deliveries were completed in four days from the members ordering their merchandise online. All of these milestones reflect the continued strength of our business across the membership offering. These great results are a reflection of the outstanding work done by our over 330,000 employees around the world. Their commitment to our company and the Costco experience for our members is truly inspiring.

I’d like to thank all of our people for their outstanding work this year and especially during our busiest time of the year. As we approach our Annual Shareholders Meeting in January, I also wanted to mention that our annual update to the Costco sustainability commitments was just made available online today. This report provides a comprehensive review of the progress we are making toward our sustainability objectives, and I would encourage all of you to take a look. With that, I’ll turn it back over to Gary to discuss the results of the quarter, and I’ll jump back on during Q&A to field some questions.

Thank you.

Gary Millerchip — Executive Vice President, Chief Financial Officer

Thanks, Ron. In today’s press release, we reported operating results for the first quarter of fiscal 2025, the 12 weeks ended November 24. We have once again published a slide deck on our investor site under Events and Presentations with supplemental information to support today’s press release. You might find it helpful to have this presentation in front of you as I walk through our results.

Net income for the first quarter came in at $1.798 billion or $4.04 per diluted share, up from $1.589 billion or $3.58 per diluted share in the first quarter last year. This year’s results included a tax benefit of $100 million or $0.22 per diluted share related to stock-based compensation, and last year’s results included a tax benefit of $44 million or $0.10 per diluted share, also related to stock-based compensation. Excluding these discrete tax items, net income and earnings per diluted share grew 9.9% and 9.8%, respectively. Net sales for the first quarter was $60.99 billion, an increase of 7.5% from $56.72 billion in the first quarter last year.

U.S. comparable sales were up 5.2% or 7.2% excluding gas deflation. Canada comp sales were up 5.8% or 6.7% adjusted for gas deflation and FX. And other international comp sales were up 4.7% or 7.1% adjusted.

This all led to total company comp sales of 5.2% or 7.1% adjusted for gas deflation and FX. Finally, e-commerce comp sales were up 13% or 13.2% adjusted for FX. In terms of Q1 comp sales metrics, foreign currencies relative to the U.S. dollar negatively impacted sales by approximately 0.3%, while gas price deflation negatively impacted sales by approximately 1.6%.

Traffic or shopping frequency increased 5.1% worldwide and 4.9% in the U.S. Our average transaction or ticket was up 0.1% worldwide and 0.3% in the U.S. This includes the headwinds from gas deflation and FX. Adjusted for those items, ticket would have been up 2% worldwide and up 2.3% in the U.S.

Moving down the income statement to membership fee income. We reported membership fee income of $1.166 billion, an increase of $84 million or 7.8% year over year. Membership fee income growth was also 7.8%, excluding FX. Remember that the recent membership fee increase doesn’t have much impact yet due to the effects of deferred accounting and represented less than 1% of the fee growth in the quarter.

In terms of renewal rates, at Q1 end, our U.S. and Canada renewal rate was 92.8%, down 0.1% from Q4 end. The worldwide rate came in at 90.4%, also down 0.1% primarily due to the U.S. and Canada.

As we mentioned on the last quarterly earnings call, our renewal rates are seeing some impact from higher growth in digital sign-ups, which renew at a slightly lower rate than our base as a whole. Underlying renewal rates and membership growth remain strong, but this mix shift is likely to have a continued effect on our published renewal rate for the remainder of 2025. We ended Q1 with 77.4 million paid household members, up 7.6% versus last year, and 138.8 million cardholders, up 7.2% year over year. At Q1 end, we had 36.4 million paid Executive Memberships, up 9.2% versus last year.

And Executive Members now represent 46.8% of paid members and 73.1% of worldwide sales. Turning to gross margin. Our reported rate in the first quarter was higher year over year by 24 basis points, coming in at 11.28% compared to 11.04% last year and up seven basis points excluding gas deflation. Core margin was higher by 31 basis points and higher by 17 basis points without gas deflation.

This was driven by mix and our credit card co-brand program. In terms of core margins on their own sales, our core-on-core margins were higher by three basis points. Ancillary and other businesses gross margin was lower by 12 basis points and lower by 16 basis points ex gas deflation. This decrease year over year was largely due to gas, partially offset by e-commerce.

2% reward was lower or better by five basis points or six basis points without gas deflation. And LIFO was flat for the quarter. We had a $19 million LIFO credit in Q1 this year compared to a $15 million credit in Q1 last year. Moving on to SG&A.

Our reported SG&A rate in the first quarter was higher year over year by 14 basis points, coming in at 9.59% compared to last year’s 9.45%. SG&A was flat adjusted for gas deflation. The operations component of SG&A was higher or worse by 15 basis points and higher four basis points, excluding gas deflation. Higher employee wages that went into effect in July drove the headwind for the quarter, partially offset by sales leverage and productivity gains.

As always, investing in our employees remains a key part of our strategy, and we will continue to focus on driving top-line sales and improving productivity to mitigate the incremental costs. Central was higher or worse by five basis points and three basis points without gas deflation. Stock compensation was lower or better by two basis points and three basis points without gas deflation. And preopening costs were lower or better by four basis points, both with and without gas deflation.

Below the operating income line, interest expense was $37 million versus $38 million last year, and interest income was $96 million versus $154 million last year. As mentioned in our Q4 earnings, interest income faced headwinds in the quarter due to lower cash balances subsequent to our special dividend in January 2024 and lower interest rates. This will continue to negatively impact year-over-year compare in Q2. FX and other was a $51 million gain in Q1 this year versus a $6 million gain last year.

This gain offset much of the headwind we saw in interest income in the quarter and was primarily due to FX. In terms of income taxes, our tax rate in Q1 was 22% compared to 24.5% in Q1 last year. As mentioned earlier, this year’s rate benefited from a $100 million discrete item related to our annual RSU vesting. Adjusted for this benefit, the tax rate for the quarter would have been 26.5%.

Turning now to some key items of note for the quarter. Ron talked earlier about our continued momentum with new warehouse openings, and capital expenditure in Q1 was approximately $1.26 billion. We estimate capex for the full year will be approximately $5 billion. Taking a deeper look into core merchandising sales, fresh led the way in Q1 with comparable sales up high single digits.

Meat was up double digits and demonstrated strength across the department. We have members who are continuing to purchase high-ticket premium cut selections and others who are gravitating more toward lower-cost-per-pound options. As always, our focus remains on delivering exceptional quality and value across every item we sell in fresh. Our nonfood category was also up high single digits despite some impact from the calendar shift.

As our buyers continue to bring in new and exciting items at great values. Golden jewelry, gift cards, home furnishings, sporting goods, health and beauty aids, luggage, kiosk, and hardware were all up double digits. This quarter, we were able to add several new high-quality brands across a broad range of categories, including Peloton, Wrangler, Springfree Trampolines, and Ruggable. Food and sundries had mid-single-digit comps with our cooler and frozen food departments leading the way.

We continue to see strong momentum with new and exciting international food items such as Synear Pork Soup Dumplings, Sona Masoori Rice, and Hot Pot beef sliced chuck rolls. Kirkland Signature continues to grow at a faster pace than our business as a whole. Our goal is always to be the first to lower prices where we see the opportunities to do so. And just a few examples this quarter include Kirkland Signature Organic Peanut Butter reduced from $11.49 to $9.99; Kirkland Signature Chicken Stock from $9.99 to $8.99; and Kirkland Signature Sauvignon Blanc from $7.49 to $6.99.

Our merchants are also driving innovation with Kirkland Signature. Most notably this quarter, we introduced new Kirkland Signature Oxi Powder and Kirkland Signature Food Storage Bags, both offering significant value to the national brand alternatives. Within ancillary businesses, pharmacy had the strongest sales growth. Our focus continues to be on keeping prescription and OTC prices low while also leveraging technology to make it easier for our members to use our pharmacy.

Recent examples include the introduction of new prescription inventory management software to better stay in stock and enabling delivery of prescriptions via Instacart. Our food court and optical departments also performed well in the quarter. Gas sales were negative low double digits due to the average price per gallon being down low double digits. Costco Travel is another way we deliver unique membership value, and these services continue to resonate well with our members.

We offer a wide range of vacation packages, car rentals, cruises, hotels, flights, and other travel-related services. And in addition to highly attractive rates, many of our offerings include a Costco shop card as extra value for booking with Costco. A couple of fun facts about our Travel business. Last year, we sold enough rental cars to fill every U.S.

Costco parking spot 8.5 times. We also offer great value to members on cruises, and our largest cruise booking last year was a 150-day around-the-world cruise starting from Fort Lauderdale and making stops in places like the Galapagos and Easter Island. The total price was $293,000 for two in the Owner’s Suite cabin and added values on the booking included a shipboard credit of $13,000 and a Costco shop card worth $25,000. Members who use Costco Travel spend approximately twice as much as members that do not use these services.

Inflation was once again essentially flat in the quarter across all core merchandise. Food and sundries and fresh foods were slightly inflationary, and this was offset by deflation in nonfoods. In the supply chain, while egg supplies have been negatively impacted by avian influenza and the recent East Coast port strikes led to a spike in paper and water product demand, overall product supply has generally been good. The predictability of on-time shipping delivery remains below pre-COVID levels and items are generally spending more time on the water.

Our merchants have adapted well to this change, and we are in a great position with inventory for the holidays. As we head into Q2, we continue to monitor for potential port strikes in India, the East Coast, and Canada, and our merchants are adopting plans as necessary to ensure we remain in stock for our members. Turning to digital and e-commerce. We continue to make progress with our technology road map and enhancements made to the member experience like the ability to check warehouse inventory via the Costco app are resonating well.

Our U.S. app was downloaded 2.9 million times in the quarter, bringing total downloads to approximately 42 million. E-commerce traffic, conversion rates, and average order value were all up year over year, helping to drive another strong quarter of comparable sales growth. While strength in volume was a meaningful tailwind to e-commerce sales, hardware, sporting goods, gift cards, and home furnishings all grew double digits year over year.

As Ron mentioned earlier, Costco Logistics also had another great quarter, driving growth in big-and-bulky items. And Costco Next, our curated marketplace achieved record sales over the Thanksgiving, Black Friday, and Cyber Monday sales period. In closing, let me provide a brief update on retail media. To use a baseball analogy, we are very much in the early innings with retail media, but we continue to believe this represents a significant growth opportunity in the future.

This quarter, we completed our first targeted media campaign through third-party media channels with one of our largest CPG partners. The campaign achieved two to three times the return on ad spend typically expected, highlighting the value we can create for our members and suppliers. Our retail media team is now working with over 25 suppliers who are eager to participate in our next wave of offsite campaigns. And finally, in terms of upcoming releases, we will announce our December sales results for the five weeks ending Sunday, January 5, on Wednesday, January 8, after market close.

That concludes our prepared remarks, and we’ll now open the line up for questions.

Questions & Answers:

Operator

Thank you, and we’ll now begin the question-and-answer session. [Operator instructions] And your first question comes from the line of Simeon Gutman with Morgan Stanley. Your line is open.

Simeon Gutman — Analyst

Hi, everyone. I hope you can hear me. My one question with a couple of parts, actually diagnosing the health of the consumer. Can you give us some sense of how you’re clearing some of the seasonal inventory, maybe apparel, bigger ticket? And then once in a while, we talk about market share in some discretionary categories.

Can you share your perspective on that? Thank you.

Gary Millerchip — Executive Vice President, Chief Financial Officer

Sure. Thanks, Simeon. Yeah, we can hear you well, and thanks for the question. Yeah.

So, maybe taking that question in a few parts. So, as we look at the consumer, I think we’re seeing a lot of similar trends that we’ve talked about on the last few quarters. What we’re seeing with our members is that now, probably more than any time in recent history, that combination of newness of items, quality, and value are really important to the member. And we’re seeing the member being very choiceful about how they’re spending the dollars.

All that being said, I think we’re finding that as our merchants are doing a great job of finding that newness and quality at great value, we’ve seen some great strength in our nonfood categories. And certainly, as you heard me say on the prepared comments, we’re seeing really strong performance across many of the categories around things like gold and jewelry, gift cards, home furnishings, sporting goods, health and beauty, hardware, all up double digits during the quarter. So, we’re pleased with the momentum that we’re seeing there. And I think it reflects the fact that our members are willing to spend as inflation comes down as long as those sort of three key ingredients that I mentioned are there for the member as well.

I think in terms of overall what we’re seeing with the member on food and grocery, I would say that we are seeing what we think is a little bit of a shift from food away from home to food at home, and that’s certainly reflected in strong meat and produce sales that we’ve seen in our own business. And we are seeing, I think, a little bit even more of a trend that we’ve talked about in prior quarters of bifurcation with the member where we have high-quality premium cuts they’re selling well. But we’re also seeing a gravitation toward those lower price-per-pound items across categories like poultry, cuts of beef, and pork as well. Ron, anything you’d like to add?

Ron Vachris — President and Chief Executive Officer

Yeah. I guess, Simeon, the other part of your question, seasonal sell-through appears to be very strong. It’s a unique retail calendar with a shorter period of time after Thanksgiving. But our buyers have been through this before, and they’ve responded properly with that as well.

So, that feels good. It seems to be a very foundational Christmas though. As you see, furniture driving a lot of our e-commerce sales, appliances, sporting goods, hardware. And so, just people are very, very basic buying this year, but good trends.

Gary Millerchip — Executive Vice President, Chief Financial Officer

And I think, Simeon, I guess I didn’t mention specifically. We tend to focus on our member and how can we deliver that great value. The data that we do see would tend to suggest that we’re growing our share across most of the categories that I mentioned.

Operator

And your next question comes from the line of Oliver Chen with TD Cowen. Your line is open.

Oliver Chen — Analyst

Hi, Ron and Gary. Happy holidays. Your traffic continues to impress a lot. As we look forward, what are your thoughts and key drivers and mix opportunities as you think about ticket and UPT? Also, you highlighted retail media, which is a huge, great opportunity.

How does that intersect with your important multi-vendor mailer? And also as you think about incrementality of that opportunity, that would be great to hear. Thank you very much.

Gary Millerchip — Executive Vice President, Chief Financial Officer

Yes. Thanks, Oliver. I think the first part of your question, you probably heard in some of the comments that we made that we were — we have been pleased with the traffic that we’ve seen and the continued frequency of shop from our members. What was nice to see, at the end of last quarter, we did see, when you adjust for foreign exchange and gasoline, that we started to turn positive on the items per basket.

And then this quarter, when you adjust for those items, we were up about 2% on the — slightly over 2%, I think, on the U.S. and 2% worldwide. So, we have seen some improved momentum on the items per basket. And I think that’s a lot of great work being done by, again, our merchants, making sure that we’ve got great product offerings in the warehouse and then our operators really executing those campaigns exceptionally well when the members are in the warehouse as well.

From a media perspective, I think we look at it very much as an incremental opportunity. Our goal is to continue to maximize the value we can put into everyday product quality and pricing. And where we’re seeing a lot of the interest in retail media is really coming from the marketing agencies, which gives us a lot of confidence that this is an opportunity for us to tap into new marketing dollars where a lot of our national brand suppliers are going to those media agencies to invest those marketing dollars to really make sure they’re getting a good return on that ad spend. And so, where we’re seeing a lot of the traction.

And again, I would emphasize it’s very early days with retail media. For us, it’s something that we’re just really embarking on that offsite journey. But really where most of the interest is coming from is from retail media agencies, which we believe is the way for us to make sure that we’re driving incrementality and growth in the model.

Oliver Chen — Analyst

Thank you very much. Very helpful.

Operator

And your next question comes from the line of Christopher Horvers with JPMorgan. Your line is open.

Christopher Horvers — Analyst

Thanks. Good evening, guys. So, can you talk about what drove the core-on-core margin performance this quarter? You have the MFI now rolling through. How do you think about reinvestment of price, either in terms of expected price reductions that you see coming down the supply chain or maybe even going above and beyond that? And just as a side question, can you define what’s in the hardware category? Is that consumer electronics? Thank you.

Gary Millerchip — Executive Vice President, Chief Financial Officer

Sure. Thank you for the question. Yes, in terms of the core-on-core margin, first of all, which I think was the first part of your question, if you break it down between the sort of three main categories that we see within the business, that’s foods, fresh, and nonfoods. Foods would have been essentially flat.

Nonfoods would have been down slightly, and fresh would have been up slightly. So, those three kind of — obviously, overall, we were just up three basis points. So, there really wasn’t a tremendous amount of change overall, but they would have been the sort of key puts and takes in the overall number.

Ron Vachris — President and Chief Executive Officer

And then the description of the hardware category really is just that. It’s storage, plumbing, lighting, power tools, batteries, those type of the household goods that you would find at a typical hardware store.

Christopher Horvers — Analyst

And then on the price investment side, your thought process there?

Ron Vachris — President and Chief Executive Officer

That’s something that we’ve done for the history of the company. We’re going to continue to invest in price. And some of it may come in holding certain prices as some commodities are starting to increase, but investing in items like Gary described, leading with Kirkland Signature. I mean, we feel that we’re going to be asking our members and our vendors to contribute with lower prices.

We’ve got to set that example and start with Kirkland. So, we’re going to continue to look at those opportunities and invest where we can and keep driving sales.

Christopher Horvers — Analyst

Thank you. Have a great holiday season.

Operator

And your next question comes from the line of Zhihan Ma with Bernstein. Your line is open.

Zhihan Ma — Analyst

Thank you for taking my question. I have a two-part question. One, I think, Gary, you mentioned the difference in renewal rates from online sign-ups and then offline sign-ups. Can you help us break it out and understand the difference in online behaviors? And second part on the retail media side.

How do you expect Costco Connect, the third-party marketplace, to contribute to the growth of retail media going forward? And will that impact the membership loyalty in any way or regard? Thank you.

Gary Millerchip — Executive Vice President, Chief Financial Officer

Yeah, sure. Thanks for the question. So, first of all, on the membership rate, I’d maybe take a step back and just overall, we’re feeling very good about the underlying membership metrics that we’re seeing. So, renewal rates and general sign-up activity and then the membership growth remains very strong.

As I mentioned in the prepared remarks, really, what we’re seeing is that over the last few years, we’ve seen some shift in more of the members that we’re acquiring coming through digital channels. And that’s helping with the comment that we made last quarter, where we’re also seeing a slightly — a reduction in the average age of members because of that change in shift as well. But what it does mean is that often, when we have new members being recruited through that digital channel, they’re renewing at a slightly lower rate than the historical base that we have. And you may recall that when we talk about membership renewal rates, it’s effectively an 18-month lag that we see — that we report out on that renewal rate.

And so, as we look forward and see that trend continuing as we build more of that new digital member into the base and it slightly affects the mix, we expect it will have a slight impact on that overall membership renewal rate that we report. So, we wanted to make sure we gave you visibility into that. When we look at individual sort of cohorts of members, we feel good about the ability for us to be able to continue to drive improvement in renewal rate, but we are going to see that impact through as it becomes a flow-through from the continued growth in digital members.

Ron Vachris — President and Chief Executive Officer

And then, this is Ron, the question on Costco Next. Costco Next is our marketplace. This is an exclusive Costco member-only marketplace. It’s fully curated by our buyers so everything that’s on that site has been reviewed by our buyers but is exclusive to Costco members.

So, we think it’s just going to enhance the relationship we have with our members and give more options for their shopping needs.

Zhihan Ma — Analyst

Got it. Just to clarify, I was wondering if you were going to have more 3P marketplace vendors using the retail media service and whether that’s — there’s any implications on the number side.

Ron Vachris — President and Chief Executive Officer

And that, again, as Gary mentioned earlier, we’re in the very early stages, and we’re going to look at where we feel the benefits will be to our members. So, that is to be determined yet.

Zhihan Ma — Analyst

Thank you.

Ron Vachris — President and Chief Executive Officer

You’re welcome.

Operator

And your next question comes from the line of Karen Short with Melius Research. Your line is open.

Karen Short — Analyst

Hey, thanks very much. I know this is maybe a little out of left field but just curious, there’s kind of been a trend in retail for some — for stock splits generally. And I’m wondering what your philosophy is on that because I know you want your employees to have an opportunity to buy stock below the store manager level. And the second question that’s kind of unrelated is just tariffs.

Any thoughts on that and thoughts on what that could do to inflation?

Gary Millerchip — Executive Vice President, Chief Financial Officer

Thanks, Karen. Yeah. On the stock split, you’re probably aware that Costco has done stock splits in the past. And it’s something that we’ll continue to evaluate and discuss with our board, but there isn’t a plan at this time for a stock split.

I think for us, the way we think about it is the economic arguments that we’re showing the past are a little bit less clear because retail investors and employees both have the ability now to buy fractional shares. But we do also recognize that there’s a benefit of the stock feeling more affordable for our retail investors and employees who are very important constituents for us. So, we’ll continue to evaluate over time. And then I think the second part of the question was on tariffs.

Karen Short — Analyst

Yeah.

Gary Millerchip — Executive Vice President, Chief Financial Officer

Yeah. I think from a tariffs point of view, what I would say is that, first of all, there’s a lot of uncertainty around the timing and scope of changes. So, it makes it difficult for anyone to predict what the impact will be with confidence. And in general, of course, tariffs raise costs so that’s not something that we see as a positive in general.

With that being said, I’ll quote my predecessor, Richard. He’d say, “When it rains, it rains on everybody.” And I think for us, we faced tariffs in the past, and we believe that our merchants and buyers are equipped, as anybody is, to sort of work through and navigate and manage that situation. We have a plan over time where we have done this in the past and typically, we’ll look where we can to pull forward inventory buying, which actually we’ve done already because of some of the less predictability around shipping and how much time product spends on the water and also because of the risk of strikes that we’ve seen in the past as well. We’ll, of course, try and work with our vendors to make sure we’re looking for ways where we can to mitigate the cost.

And we also consider alternative sourcing locations where that’s practical as well. I guess the final sort of string in our bow would be is if we didn’t see the value in an individual SKU, then we could always pivot to a different SKU item for the member if we felt the value just wasn’t there, and it was more effective for us to move to a different item in the warehouse. I guess in context for us, the sort of the amount of business that’s affected, about a quarter of our business is nonfoods, and then a subset of that is imported. So, remember, it’s a minority of our overall business and then it’s a smaller part of that as well we actually import just for context.

Karen Short — Analyst

Great. Thank you very much. Have a great holiday.

Gary Millerchip — Executive Vice President, Chief Financial Officer

You, too. Thanks.

Operator

And your next question comes from the line of Edward Kelly with Wells Fargo. Your line is open.

Edward Kelly — Analyst

Yeah. Hi. Good morning, everyone. I wanted to ask you about capex.

Capex has kind of been inching up over the last couple of years. But taking a step back and thinking about the evolution of your business, your goals, growing the moat, how are you thinking about the outlook for capex? Any meaningful changes ahead? And as part of this, anything different sort of in the pipeline from a project or priority standpoint?

Gary Millerchip — Executive Vice President, Chief Financial Officer

Yeah. Thanks, Ed. I wouldn’t say there’s really any major change. As you mentioned, we have been gradually increasing capital expenditure, more a reflection of the continued growth of the business as we’ve opened new warehouses, seen some inflation in those costs over the last few years.

And we have, of course, been investing a little bit more in technology as well as we sort of modernize the platforms there and look to build the right capabilities to support growth in the future. But I think philosophically, we focus on — job No. 1, of course, is to focus on the warehouses and invest in continuing to maintain the quality of our fleet and invest in new growth warehouses in that 25 to 30 range, updating our supply chain and depots to support the capability there and both digitally. And then also, as I mentioned, sort of technology investments.

But I wouldn’t indicate at this point that there’s any major change in trajectory. It’s more just a continuation of the growth strategy that we’ve had in executing on our strategy.

Edward Kelly — Analyst

OK. Thank you.

Operator

And your next question comes from the line of John Heinbockel with Guggenheim. Your line is open.

John Heinbockel — Analyst

Hey, guys. Two quick things. Philosophically, price investments get a lot of publicity. But when you think about reinvesting the MFI increase, price, product quality, right, IT labor, there’s a lot of things to invest in.

Where do those other things rank relative to price? And then what does the International Club pipeline look like? I’m thinking in particular where you control sites, even they may be years away, is that — I don’t think it’s over 100, but how big is that pipeline today?

Gary Millerchip — Executive Vice President, Chief Financial Officer

Yeah. Thanks, John. I’ll jump in first and Ron may want to add some color as well. I think overall, we look at the reinvestment of the membership fee holistically.

So, it’s partly where is it that we can lower prices, of course. Part of it is where can we mitigate the impact of inflation to maintain the value for the member even if costs are increasing. It’s if we — how can we improve the membership experience, including investing in our employees’ wages as we’ve done recently as well. And of course, innovation with new products through Kirkland Signature.

So, I think we tend to look at it holistically and say, how do we make sure that when we think about what our members are paying for their membership fee each year, that we’re delivering more value and showing them that they’re getting greater value than they’re paying by a meaningful margin for the value of being a member. Ron, anything you want to add on that?

Ron Vachris — President and Chief Executive Officer

No, I think that that’s accurate. And an expansion around the world, I think you’ll continue to see an equal amount of 30 warehouses opening up over the next few years for sure, a good portion of those being out of the U.S. We see some great opportunities in Canada and Mexico have been strong countries for us. We continue to see growth opportunities both in Europe and Asia as well.

So, some of these projects take a lot longer than other ones will so they’ll come on at different times. But I think the outline of 30 a year seems very realistic and a good portion of those, not quite half, to be outside of the U.S.

John Heinbockel — Analyst

Thank you.

Ron Vachris — President and Chief Executive Officer

You’re welcome. Thanks, John.

Operator

And your next question comes from the line of Rupesh Parikh with Oppenheimer. Your line is open.

Rupesh Parikh — Analyst

Good afternoon, and thanks for taking my question. So, I just wanted, Gary, to go back to your comment, Gary, that core margins ex gas were up 17 basis points, and you called out mix and credit card co-brand program. Is there any more color you can provide in terms of what’s driving that?

Gary Millerchip — Executive Vice President, Chief Financial Officer

Sure. Yeah. Thanks, Rupesh. Overall, as you mentioned it, we were pleased with where reported gross margin rate came in.

We tend to look at it ex gas deflation, as you know, and that was up seven basis points and then core-on-core was up three. So, I think the overall message is that things were stable when we look at the gross margin rate. There were a number of puts and takes in that that largely offset each other within the overall results. The main headwind, as we signaled potentially could be the case, was around gas, which was impacted by the fact that we had a major event, obviously, 12 months ago or so in the Middle East that created volatility, and often that can create some strange margin performance, and we were cycling that.

So, that was the large headwind. I wouldn’t say overall that we’ve seen, in the long term, gas margins be unpredictable. It just tends to be more unpredictable on an individual quarter when you have that volatility. So, that was the sort of biggest headwind.

And then offsetting that in the quarter, we had some benefit again this quarter from e-commerce as margins improved there, and the rate of improvement in e-commerce would have been largely similar to what we saw last quarter. So, we were pleased with the progress we continue to see there. And then as you mentioned in the call, we had a couple of offsets. We saw some benefit from mix as we look at the business.

And then secondly, we saw some benefit from the co-brand credit card program, as you mentioned. Essentially, the way the credit card co-brand works is that we fund a portion of the rewards that are paid to members, and then we receive various incentives and payments from our issuing bank and all that flows into gross margin. And essentially, the net effect of that was favorable for the quarter, which offset, along with mix and the e-commerce benefits, the gas headwind. So, as I mentioned, overall, I think there were no major takeaways from the puts and takes, but we’re pleased that gross margin was up slightly, even though we continue to invest in lower prices and deliver more value for the member.

Rupesh Parikh — Analyst

Great. Thank you for all the color. Happy holidays.

Gary Millerchip — Executive Vice President, Chief Financial Officer

You, too.

Operator

And your next question comes from the line of Peter Benedict with Baird. Your line is open.

Peter Benedict — Analyst

Hi, guys. Thanks for taking the question. I want to — maybe Ron, for you on the runway for growth in the U.S. You said 30 new clubs per year next handful of years here.

Most of those are going to be in the U.S. You guys are just over 600 right now. I think if you include the other two players, we’re talking about 1,400-plus clubs in the U.S. They’re growing as well.

How do you think about maybe the capacity for the club industry in the U.S. and maybe for Costco in particular? What are you seeing that gives you confidence in your ability to keep growing at this pace in the U.S.?

Ron Vachris — President and Chief Executive Officer

I think the one thing I see is the continued success of operations like I spoke of, Pleasanton, California that we opened the day before Thanksgiving, right in between three high-volume Bay Area locations in the East Bay. And we opened this warehouse up not long ago and even finding incremental business, significant incremental business from our members. As we relieve the pressure off of those high-volume warehouses, we see the existing member base coming more frequently and the build-back is quite nice for us. So, we see incrementality of the new warehouse and then we see very, very quick build-back on those as well.

So, not only do we still see some opportunities. Scarborough, Maine, we opened over a year ago. Building has had a tremendous first year in a smaller market like that that we see. So, we see some runway for a few years ahead of us yet where we have a combination of new markets.

But we really are focusing on how do we continue to improve that member experience by relieving pressure off of some of these super high-volume warehouses. And we’re finding it to be incremental to the business.

Peter Benedict — Analyst

Thank you very much.

Operator

And your next question comes from the line of Greg Melich with Evercore ISI. Your line is open.

Greg Melich — Analyst

Hey, thanks. I wanted to circle back on e-commerce, the growth there of 13%. Could you update us on what the penetration is now and also how, if you add on Instacart and I guess the Uber Eats start, where we’re getting up to on that?

Gary Millerchip — Executive Vice President, Chief Financial Officer

Yeah. Thanks, Greg, for the question. Yes, we were pleased with the growth that we saw in digital. I think it’s important to remember as well, as we shared in the November sales release, that there was some impact of timing of calendar as well.

So, the 13% — if you think about, I think we shared — the team shared that we’re like a 15% headwind in our November sales results. And so truly, if you take about a third of that, you wouldn’t be 1 million miles out with the impact that it would have had on our sales in the quarter as well. So, we were pleased overall with the underlying trend and the metrics that we saw around app downloads and traffic and average order were all up as well, which was encouraging. If you think about the mix of the business, it would be in the sort of — from the numbers that we disclosed publicly as being part of our digital business in the sort of 7% to 8% range of our total sales.

So, as you know, it continues to outpace our overall growth, and we expect that trend to continue. You’re exactly right that when you recognize how we define it compared to how others define it, we wouldn’t include some of those third-party sites that are delivering. And there’s a few other business — parts of our business that we don’t include in there as well that would fit in under other businesses. When we add those in there and when you sort of strip out gas, which I think most companies do when they compare, we’d be north of 10% in terms of total penetration of e-commerce sales.

Greg Melich — Analyst

Got it. Thanks. And then maybe circling back on private label. Could you just update us now on the penetration, especially given some of those great new items you’ve come out with that you highlighted earlier in the call, and what that could eventually be?

Ron Vachris — President and Chief Executive Officer

Yeah. I think it’s up about — almost 33% at this point in the U.S. is where we’ve now hit. And that’s primarily the food and sundry side of things where we see the majority of our private label.

But we’re just bumping up against 33% and it’s growing a little faster than the rest of the business.

Greg Melich — Analyst

That’s great, guys. Have a great holiday.

Ron Vachris — President and Chief Executive Officer

You as well. Thank you.

Operator

And your next question comes from the line of Scott Mushkin with R5 Capital. Your line is open.

Scott Mushkin — Analyst

Thanks. Hey, guys. Thanks for taking my questions. So, I just wanted to kind of maybe ask a higher-level question around your business.

The traffic growth, which is the lifeblood of a retailer, has been very strong, given the size of the company. You talked about the Pleasanton opening. So, I was wondering if you can kind of give us an idea of what you think is driving this. Is it the club format generally resonating consumer mindset initiatives? And how do we think of [Technical difficulty]

Ron Vachris — President and Chief Executive Officer

We’ve lost you halfway through the questions. I’m sorry.

Scott Mushkin — Analyst

I apologize. I don’t know why that happened. You guys are clear as a bell. Basically, just to set this type of traffic growth, your initiatives, the industry content set, and what your thoughts are about keeping this type of traffic growth going for years?

Ron Vachris — President and Chief Executive Officer

OK. And I think we got most of your questions, and it really regards around traffic growth and what we see that happening, and if we feel that that can continue on. And that’s what I’ll try to answer, and hopefully, that was what you’re talking about. I think from some of the comments you made, I think it’s all of the above.

And some of the fun facts that I gave out there was just really to point to the growth success we’re seeing in several parts of our company, be it the pharmacy, the food court, our fresh foods area. I’ve got to contribute a big part of that to our buyers and operators and the work that they’re doing and keeping relevance to the member needs and being reflective of what — we’re focusing on some of the lower-cost proteins for some of our members while we’re focusing on the Wagyu for the members that would like those goods as well. So, I think our people are doing a tremendous job knowing our customer. But it really is all parts of the business are contributing.

The entire business is very strong. Our nonfood business continues to strengthen. E-commerce is doing their part. But it just goes back to execution from the teams.

Operator

And your next question comes from the line of Robby Ohmes with Bank of America. Your line is open.

Robert Ohmes — Analyst

Thank you. Thanks for taking my question. It’s on competitive impact so it may end up sounding like more than one question. But I — are there any competitive impacts you guys are seeing worth calling out benefits or headwinds? So, maybe remind us, when a regional player you compete with raises their membership fee, does that help you guys at all retain or retention rates, things like that? And also, I know you’ve been asked this, but any pressures you’re seeing on the fact that you guys don’t do Scan & Go and Sam’s seems to be doing really well with it, and any other competitive impacts you can call out? Thanks.

Gary Millerchip — Executive Vice President, Chief Financial Officer

Yeah. Thanks for the question, Robby. I think we’re generally our own biggest competitor, honestly. That’s generally how we approach the business.

Maybe the couple of trends that add some color on that that I would call out would be we haven’t talked for some time about cannibalizing our own business with opening new warehouses. And as Ron mentioned, generally, we’re seeing significant incrementality. But as we have opened more warehouses, we certainly create some of that. We don’t split it out in our numbers.

We just flow it through our results, but it does impact the number because we are moving some traffic from existing warehouses when we open a new one. I think from a competitive point of view, I guess the biggest tailwind I would call out, and Ron mentioned it briefly in prepared comments around our business is that, obviously, we’re seeing quite a lot of disruption in the retail pharmacy business right now. And I think with the work our teams are doing to deliver great value for the member and continuing to improve the experience and make it easier to engage with our pharmacists, as I mentioned in my prepared comments, we’re seeing significant growth in that business today. I think that’s partly the work that we’re doing and partly, I think there is some disruption in the industry currently as well.

Robert Ohmes — Analyst

And just any comments on Scan & Go and maybe remind us why that might not be on your agenda?

Ron Vachris — President and Chief Executive Officer

I mean, I think we’ve got — our job is, as Gary said, to take care of the members and make sure that they move through it. Do we hear about Scan & Go? Yes, we do. Self-checkout has been a great option for our members, and we focus on that. Our job really is that we will continue to keep an eye on technology and how we can improve that front-end experience that is the one pinch point.

That was the focus of our door scanners as we took a lot of pressure off of the cashiers and moving lines through and saw some nice productivity enhancements when we did that. But at this point, it’s not something we’re hearing quite often. We do hear it randomly, but we’re going to keep an eye out there on technology and make sure that we’re doing our part to keep the experience as strong as we can for our members.

Robert Ohmes — Analyst

Great. Thank you.

Ron Vachris — President and Chief Executive Officer

You’re very welcome.

Operator

And your next question comes from the line of Michael Lasser with UBS. Your line is open.

Michael Lasser — Analyst

Good evening. Thank you so much for taking my question. Given the recent sales contribution from categories like precious metals and gift cards, have you, A, expanded the aperture of what Costco is now willing to sell or what the member is willing to buy from Costco? And B, have you changed your philosophy on the margin where you are expecting more profitability from traditional product vendors to offset the negative margin impact from selling these items that don’t drive a lot of profit? Thank you very much.

Ron Vachris — President and Chief Executive Officer

I think as far as new categories, you go back to caskets that we started many years ago, that we would have never thought would have been a business for us, and we’re able to find a way to deliver great member value and great quality. And that was such as the addition to gasoline we had many years ago in the company as well, is that can we find something that meets the needs of our members and ensure we can deliver the right quality and the great price. So, I think the tickets and precious metals was, again, great work by our buying teams and finding new areas that we can deliver great quality and great value to our members. And I see them working hard on the next categories that are going to be coming for us.

But that’s part of the treasure hunt at Costco is always keeping nimble and continue to change those categories that we can find new areas to improve the lives of our members.

Gary Millerchip — Executive Vice President, Chief Financial Officer

Yeah. Maybe, Ron, just to add on that, Michael, to your question, I think we give a bit more credit, in addition to Ron’s point, about it’s great work by our merchants, creating new and exciting items. We give a bit more credit, I think, to the impact they have on the business. Not necessarily because we see significant margin, as you mentioned from them, but they’re driving significant traffic to our website, and we do get a high proportion of cross-selling when members are buying things like precious metals, so it’s driving our ability to grow our digital business overall.

And I think we see it as something that also just creates a lot of awareness about our e-commerce business as well. So, as you know, we don’t advertise, but it’s identifying these exciting items that help drive traffic and awareness of what Costco offers. And I think some of that is a factor in what helps with the continued growth in e-commerce not just from a top-line perspective but also the margin improvement that we talked about on the call. So, I think we would look at it a little bit more broadly for sure.

Michael Lasser — Analyst

But just to clarify that second point, are you having to offset the margin impact from selling these traffic-driving items that don’t carry a lot of margin by requiring even better margins on the rest of the assortment?

Gary Millerchip — Executive Vice President, Chief Financial Officer

No. What we’re seeing is we’re driving a mix improvement overall because of the traffic that’s driving and the engagement with the website. And remember, of course, as well that there’s very low SG&A cost associated with that product, so it also helps create leverage in the e-commerce model as well.

Ron Vachris — President and Chief Executive Officer

Yeah. So, the answer is really no. We’re not making more margin on those other items to offset that. We’re just driving down our SG&A, so we don’t require more margin.

Michael Lasser — Analyst

Thank you very much, and have a good holiday.

Ron Vachris — President and Chief Executive Officer

You as well. Thank you.

Operator

And your next question comes from the line of Chuck Grom with Gordon Haskett. Your line is open.

Chuck Grom — Analyst

Hey, thanks very much. Ron, can you talk about Costco’s right to earn more wallet share with your more affluent higher-income shopper, particularly on the discretionary side of the business? And then Gary, just on the margin bridge, can you just explain why the 2% rebate was favorable five basis points? Historically, it’s almost always negative or neutral. Thank you.

Ron Vachris — President and Chief Executive Officer

Sure thing. Chuck, your question was, why are we gaining more market share with our affluent customers? Is that what your question was?

Chuck Grom — Analyst

No. My question is, do you think you’ve earned the right to earn more wallet share with the higher-income shopper?

Ron Vachris — President and Chief Executive Officer

Absolutely. I think we do. I think as we continue to find the brands, I mean, and deliver also with great quality, Kirkland Signature, we will continue to see that growth and that customer. We resonate.

That is our member and that’s who we cater our mixes to. And I think that we see great runway for us in the future.

Gary Millerchip — Executive Vice President, Chief Financial Officer

And then, Chuck, on the second part of your question, so with the 2% Rewards, think of it as that throughout the year, we’re accruing what we believe is the right amount of redemption for the 2% Rewards. And generally speaking, we’re going to be conservative around that because we want to make sure we’re fully accrued. And then when we get into the first quarter each year, we’re sort of truing up, if you like, what the actual spend was. So, I’d almost think of the adjustment this quarter sort of offsetting the increases that we saw in the back half of last year.

And so, you have to net those out to say underlying, there is a gradual increase in the 2% spend but it kind of nets off between quarter by quarter.

Chuck Grom — Analyst

OK. So, it was essentially a true-up then?

Gary Millerchip — Executive Vice President, Chief Financial Officer

Right.

Chuck Grom — Analyst

OK, great. Awesome. Thank you.

Operator

And your next question comes from the line of Kelly Bania with BMO Capital Markets. Your line is open.

Kelly Bania — Analyst

Hi. Thanks for taking our questions. Ron and Gary, I was wondering if you could just talk a little bit about your partnerships with Instacart and Uber now that you’ve had Uber for quite some time. What you’ve learned? What is the pace of growth and how that’s adding to comps? And just general awareness among your membership base of the service there, particularly as you add new services like you mentioned, the pharmacy, I guess, coming in, and what something like that could do to the growth there.

Ron Vachris — President and Chief Executive Officer

Yeah. I guess I will start with that very strong partnerships with both organizations. We’ve closely looked at what the behaviors of the members were and found great incrementality to our members shop, frequency goes way up and it changes the shopping habits. I think they’ll use us more for a fill-in between their big Costco brick-and-mortar shop to go into an Instacart or an Uber and shop those directions.

So, I think that we’re finding that it’s the most cost-effective way to do some small nonfood item deliveries as well, where we would have otherwise shipped those via UPS or a carrier from a distribution center. We can now have those to a member within a few hours. So, if you’re looking for a blender that will fit in the back of a Prius, we can get that to you in a couple of hours at a very low cost. So, it’s improving our e-commerce delivery speed and time to the member, and convenience is there as well.

So, we’re very happy with the partnership. Our head merchant works very closely with both of those organizations, and we think it’s a great service with our members.

Gary Millerchip — Executive Vice President, Chief Financial Officer

And I guess the only thing to add, Kelly, is the first part of your question, it continues to grow very strongly so at least in line with the pace that we see in our digital business overall.

Ron Vachris — President and Chief Executive Officer

Yeah, slightly higher than our e-commerce business growth.

Operator

And your next question comes from the line of Chuck Cerankosky with Northcoast Research. Your line is open.

Chuck Cerankosky — Analyst

Good afternoon, everyone. Could you talk a little bit about labor relations and the current negotiations with the Teamsters, please?

Ron Vachris — President and Chief Executive Officer

I guess, Chuck, what I will say about that is that at Costco, we will always take care of our employees as we always have done. That means that we’re going to focus on a fair and timely process for getting to an agreement with the Teamsters. We have a 40-year track record of dealing fairly with the Teamsters Union, and really nothing has changed about that. So, this is — these are Costco employees.

They are of great importance to us. And we’re going to do everything we can to take care of those employees as we do all of our employees.

Chuck Cerankosky — Analyst

Great. Thank you.

Operator

And your next question comes from the line of Corey Tarlowe with Jefferies. Your line is open.

Corey Tarlowe — Analyst

Hi. Good afternoon, and thanks for taking my question. I was wondering if you could talk a little bit about the international performance that you saw. Comps decelerated on a multiyear stack versus Q4.

So, just curious, by region, if there’s anything to call out that changed versus the prior quarters. Thank you.

Gary Millerchip — Executive Vice President, Chief Financial Officer

Yeah. Thanks for the question, Corey. I don’t think there’s anything we’d be particularly calling out. I mean, there’s certainly some nuances sometimes between some of the international markets of when certain holidays fall and they would have had — I’ll give you an example, which I wasn’t familiar with before joining the company and having recent conversations that in Taiwan, there’s a big impact from the holiday season in the same way there is here around Black Friday.

And so, there are nuances like that that we see in individual markets that sometimes can affect the calendar. But overall, we’ve been pleased with the momentum that we’ve seen in the international businesses. And we continue to see strong growth relative to both our own internal expectations and then also as we look at the growth in those markets, how we continue to grow our market share. So, nothing I would call out as being unusual there.

Corey Tarlowe — Analyst

Thank you.

Operator

And we have time for one more question. Your final question comes from Laura Champine with Loop Capital. Your line is open.

Laura Champine — Analyst

Thanks for taking my question. It’s a follow-up on your digital business, which obviously is growing well. But how would senior management diagnose or grade your online presence from a look, feel, and function perspective relative to your competition? And related to that, this growth in members who are joining online, is that something you’re driving, or is that just an output of the attractiveness of your online offer?

Gary Millerchip — Executive Vice President, Chief Financial Officer

Yeah. Thanks for the question. I think, again, I’ll say we’re probably our own toughest critic. I think when we look at our business overall and we look at the growth over the last 10 years, we’ve actually grown at a faster pace than the e-commerce sort of business in the U.S.

has grown in general. So, in one respect, we’re very pleased with the momentum and the growth that we’ve seen and continuing to see that higher engagement. But we’re never satisfied. We believe there’s more work we can do to keep improving the member experience.

We made recent changes with things like search functionality and making inventory available through the mobile app. And those changes are certainly — members are seeing the benefit of that and commenting positively on the changes that we’re seeing. But we know that we’re on a technology journey. We’ve sort of been building the foundations of that journey over the last few years, and the goal is to keep getting better and to keep enhancing the member experience.

So, I’d say we still believe there’s more work to do. And we believe by doing that work, we can continue growing our digital business even more effectively.

Ron Vachris — President and Chief Executive Officer

And I would add to that. We realize that we do have some opportunities. We definitely see that we can continue to improve. Gary is exactly right.

We’re doing the back-of-the-end — back-of-the-house work at this point, speed, stability, making sure that all the foundational work is done so we can build on that. And then I think in short order, people will start seeing the front side of things that will come in. But I think Costco Logistics is a great example of the progress we’ve made. We are now able to deploy things around the U.S.

and have deliveries made in four days, which a couple of years ago would have taken us two weeks. So, we’re seeing the distribution centers coming online. We’re starting to see the app usage go way up, functionalities being added to that as well. So, it’s a journey.

We’re going to start seeing some more forward-facing improvements in the next 12 months that we — as we sort of start putting our logistics side behind us and we get those things taken care of. And as far as the e-commerce engagement with membership sign-ups, probably the biggest difference is that we have less Executive Members sign up online, which do renew at a higher basis. And so — and I think that that big part — a big part of that is that they don’t have an employee to talk to when they’re making that transaction. And they don’t understand all the benefits of the Executive Membership.

So, we’re able to capture those later on in the path. And — but that’s the first thing we see there is that at least we start engaging with them as a member and then we will work on showing them the benefits of the Executive Membership down the road.

Laura Champine — Analyst

Got it. Thank you.

Operator

And ladies and gentlemen, this concludes today’s conference call. [Operator signoff]

Duration: 0 minutes

Call participants:

Gary Millerchip — Executive Vice President, Chief Financial Officer

Ron Vachris — President and Chief Executive Officer

Simeon Gutman — Analyst

Oliver Chen — Analyst

Christopher Horvers — Analyst

Zhihan Ma — Analyst

Karen Short — Analyst

Edward Kelly — Analyst

John Heinbockel — Analyst

Rupesh Parikh — Analyst

Peter Benedict — Analyst

Greg Melich — Analyst

Scott Mushkin — Analyst

Robert Ohmes — Analyst

Robby Ohmes — Analyst

Michael Lasser — Analyst

Chuck Grom — Analyst

Kelly Bania — Analyst

Chuck Cerankosky — Analyst

Corey Tarlowe — Analyst

Laura Champine — Analyst

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