01:51 PM EDT, 07/11/2024 (MT Newswires) -- Costco Wholesale's ( COST ) membership fee hike supports earnings visibility into the next two fiscal years, BofA Securities said.

Late Wednesday, the warehouse operator said it will raise annual membership fees for Gold Star, business, and business add-on members in the US and Canada by $5 to $65 and for executive memberships by $10 to $130. The changes are effective Sept. 1.

The fee hikes will affect some 52 million memberships, "a little over half" of which are executive, according to a statement. The company said it last raised membership fees in the US and Canada in June 2017.

The fee increase is expected to drive $370 million to $380 million of incremental membership fee income over the next two fiscal years, with the benefit likely to be strongest in the middle of the period, BofA analyst Robert Ohmes said in a note emailed Thursday.

"(Costco) does not expect an (earnings-per-share) impact from the fee increase as the company remains committed to reinvesting back into the business," Ohmes wrote. The brokerage increased its fiscal 2026 EPS estimate to $19.35 from $18.60.

Costco reported late Wednesday that its net sales rose 7.4% year over year to $24.48 billion for the retail month of June. Comparable sales for the five weeks ended July 7 grew 5.3%, with a 5.6% increase in the US.

Non-food categories "continue to resonate" with the company's members, Ohmes said.

BofA increased its price objective on the Costco stock to $962 from $874 while reiterating its buy rating. The company's shares were down 3.7% in Thursday afternoon trade.

The brokerage said it expects Costco to grow its market share as consumers continue to adjust to higher prices, making the company's "impressive value proposition and price positioning even more attractive."

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