Costco Shareholders Uphold DEI Initiatives
Costco shareholders rejected a proposal urging the wholesale club operator to evaluate risks posed by its diversity, equity and inclusion (DEI) practices, as reported by AP News. More than 98% of shareholders voted against the proposal during their annual meeting on Jan. 23.
The National Center for Public Policy Research, a conservative think tank based in Washington, D.C., had submitted the proposal, arguing that Costco’s DEI initiatives hold “litigation, reputational and financial risks to the company, and therefore financial risks to shareholders.”
According to Costco’s board, the proposed report would not provide “meaningful additional information” to shareholders, and the company believes that its current DEI efforts actually enhance the company’s capacity to attract and retain employees who inevitably help its business succeed.
The club retailer is coming off a solid first-quarter performance. Costco posted a 7.5% increase in net sales, hitting $60.99 billion for the 12-week period ending Nov. 24, and boosted same-store sales by 7.1%. Earnings per share (EPS) came in at $4.04 versus the expected $3.79.
For its full fiscal year 2024, the company reported net sales of $249.6 billion, an increase of 5.0%. Net income was $7.367 billion, $16.56 per diluted share, compared with $6.292 billion, $14.16 per diluted share, in the prior year.
Meanwhile, Walmart recently faced backlash when a group of shareholders sent a letter to CEO Doug McMillon to convey their disappointment regarding the retailer’s decision to cut back on its own DEI initiatives and commitments.
Walmart joins a growing list of businesses stepping away from DEI programs targeted by conservative groups. Other brands scaling down or dropping their DEI efforts include Meta, Amazon, Molson Coors, Tractor Supply, Caterpillar, John Deere, Lowe’s, Ford, Toyota and Harley-Davidson.
In his first week in office, President Donald Trump signed an executive order ending DEI programs in federal agencies.
Costco currently operates 897 warehouses, including 617 in the United States and Puerto Rico, 109 in Canada, and 41 in Mexico. It also operates e-commerce sites in eight countries. The company is No. 3 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. Bentonville, Ark.-based Walmart U.S. is No. 1 on The PG 100. PG also named both companies to its Retailers of the Century list.
