Costco Wholesale, the popular warehouse club, announced on Wednesday that CEO Craig Jelinek will be stepping down from his position. Jelinek, who has been at the helm of the company since 2012, will be succeeded by Ron Vachris, the current chief operating officer. The leadership change will take effect on January 1.
In a news release, Costco stated that Jelinek and Vachris have worked closely together for nearly two years, and this transition is part of a long-standing succession plan. Jelinek will remain at Costco through April in an advisory role and will continue to serve on the board of directors.
The news of Jelinek’s departure did not significantly impact Costco’s stock performance, as shares remained flat during after-hours trading. However, the company’s stock has seen an impressive rise of 26% this year, outperforming both the S&P 500 and many other retailers.
Costco has experienced significant growth in sales, driven by multiple factors such as the pandemic, inflation, and millennials relocating to the suburbs. The warehouse club has seen increased demand from customers who stocked up on pantry items during the pandemic and sought relief from rising grocery and gas prices. This sales growth has also been seen by rival Walmart-owned Sam’s Club.
Although Costco’s overall sales have remained strong over the past year, there has been a decline in discretionary categories such as jewelry and electronics. In the most recent fiscal quarter, there was an increase in customer visits but a decrease in average transaction amount, indicating that shoppers were spending less.
Ron Vachris, the incoming CEO, has a long history with Costco, having started his career at the company as a forklift driver. He has been with the company for over 40 years, making him well-acquainted with its operations and values.
In a separate announcement, Costco disclosed that its board has approved a quarterly cash dividend of $1.02 per share on Costco common stock. The dividend payout is expected to occur in mid-November.
As Costco prepares for this leadership transition, it will be interesting to see how Vachris steers the company in the coming years and maintains its momentum amidst evolving consumer trends and market challenges.