By Granth Vanaik

July 10 (Reuters) - Costco Wholesale ( COST ) said on

Wednesday it would hike annual membership fees for the first

time in seven years for its U.S. and Canada customers, effective

Sept. 1.

The retailer's memberships offer a range of incentives to

customers, including testing of free samples, discounts on food,

gas, home insurance, travel and grocery items and an annual 2%

reward on qualified purchases at its warehouses.

The annual fee, last raised in June 2017, would increase by

$5 to $65 for "gold star" and business members and to $130 from

the earlier $120 for executive members, the company said.

Costco said the maximum annual 2% reward associated with

executive membership will also increase to $1,250 from $1,000.

The hike will affect around 52 million members, a little

over half of them being of the executive category, the

membership-only retailer said.

The company's shares, up about 34% this year, rose 2.2% in

extended trading.

"The market has been expecting (discussion of) a membership

fee hike for a couple years ... management historically tends to

raise membership rates every 5 to 6 years," said Michael Ashley

Schulman, chief investment officer at Running Point Capital

Advisors.

"This announcement will be a welcome relief to those who

have been waiting for it and should provide a solid lift to

revenue as well as the stock," Schulman added.

Revenues from membership fees had increased about 7.6% in

the third quarter ended May 12. For fiscal 2023, membership fee

revenue accounted for 1.9% of the company's total revenue.

Separately, Costco reported on Wednesday a 7.4% increase in

net sales to $24.48 billion for the retail month of June.