Richard A. Galanti
Executive Vice President and Chief Financial Officer at Costco Wholesale
Thank you, Lisa, and good afternoon to everyone. I will start by stating 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. Our 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.
The 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.
In today's release, we reported operating results for the first quarter of fiscal '24 for the 12 weeks ended November 26th. Reported net income for the 12-week first quarter came in at $1.509 billion or $3.58 per share from a $1.364 billion or $3.7 per share in the 12-week first quarter last year. This year's results included a tax benefit of $44 million or $0.10 a share related to stock-based compensation. Last year's results included a tax benefit of $53 million or $0.12 per share. Related to stock-based compensation and also included a charge of $93 million pre-tax or $0.15 per share, primarily related to downsizing our charter shipping activities.
Net sales for the first quarter were $56.72 billion, a 6.1% increase over last year's first quarter 53.44 billion. Net sales were benefited by approximately 1.5% to 1% in the US and worldwide from the shift to the fiscal calendar as a result of the 53rd week in fiscal 2023.
The following comparable sales reflect comparable locations year-over-year and comparable retail weeks. In the US, reported 2% comp sales ex-gas deflation and FX, 2.6%, Canada reported 6.4%, ex-gas, and FX, 8.2% other International reported 11.2% ex-gas and FX, 7.1%. For total company reported 3.8% and 3.9%, excluding those two items. E-commerce, which was reported on us as 6.3%, came in at 6.1% excluding FX.
Overall, for the first fiscal quarter. Fresh foods were relatively strong, once again with food and sundries right behind. Non-foods showed improvement over the September-October-November timeframe as did comp sales. In terms of Q1 comp sales metrics traffic or shopping frequency increased 4.7% worldwide and 3.6% in the United States. Our average transaction was down nine-tenths of a percent worldwide, and down 1.6% in the US. Foreign currencies relative to the US dollar positively impacted sales by approximately four-tenths of a percent while gasoline price deflation, negatively impacted sales by approximately six-tenths of a percent.
I've got more than a few calls in the past few weeks as to how many we sold up in the US, leading up to the Thanksgiving holiday. In the US in the three days leading up to Thanksgiving, we sold $2.9 million of our famous Pumpkin pies along with $1.3 million of Apple pies and corn pies. So over four million pies in total during the three days.
Back to the income statement here. Next on the income statement is membership fee income. In the quarter, we reported a 1.082 billion or 1.91%, that's an $82 million or 8.2% increase, and a four basis-point increase over the first quarter last year. In terms of renewal rates at the first quarter end, our US and Canada renewal rate stood at 92.8%, while the worldwide rate came in at 90.5%, both of these rates were up one-tenth of 1% from those numbers by 12 weeks earlier at the end of the fourth quarter.
Membership growth continues, we ended Q1 with 72.0 million paid household members up 7.6% versus last year, and 129.5 million cardholders up 7.1% with consistent growth throughout the quarters. At Q1 end, we had 33.2 million paid executive members, an increase of 939,000 during the 12-week since Q4 end. Executive members now represent a little over 46% of our paid members, and a little over 73% of worldwide sales.
Moving down the income statement next is our gross margin. Our reported gross margin in the fourth quarter was higher year-over-year by 40 basis points coming in at 11.04%, up from Q1 of last year at 10.61%, that 43 basis points reported number ex-gas deflation would be plus 36 basis points. As I normally do here we write down two columns and six line items. The first column is reported in the first quarter. The second column is margins excluding gas deflation. It's the year-over-year change. In the first quarter. On a core merchandise plus three basis-points reported minus three basis-points ex-deflation. Ancillary and other businesses plus 24% reported and plus 22% ex-deflation gas deflation, 2% reward lower year-over-year minus four basis points reported and minus three basis points ex-gas deflation. LIFO plus three basis points and plus three basis points and other plus 17 basis points, plus 17 basis points for a total again reported year-over-year, up 43 basis points and ex-gas deflation, up 36 basis points.
Starting with the core. Again, it was a total company, it was plus three basis points and minus three basis points reported in ex-gas deflation. In terms of core margin on their own sales or core on core margins were up by five basis points year-over-year. Ancillary and other business gross margin again, higher by 24 basis points and higher by 22 basis points, ex deflation, gas deflation. This increase was driven largely by gas and e-com. Our 2% reward higher by four basis points and higher by three basis points ex-gas deflation reflecting higher sales penetration coming from our executive members. LIFO plus three basis points. We had a $15 million LIFO credit in the first quarter of this year. This compared to a very small $0.5 million LIFO charge in Q1 a year ago.
And then the other line item, 17 basis points to the positive, as was mentioned earlier, last year in Q1, there was a 17 basis point impact from a 93 million pretax charge primarily related -- primarily for the downsizing of our charter shipping activities.
Moving onto SG&A. We reported SG&A of 9.45%, higher by 25 basis points than last year's 9.20%. Again in Q1, right down the two columns reported without gas deflation operations minus 18 basis points and minus 14 basis points minus being, meaning it's higher year-over-year, central minus two basis points and minus one basis point; stock compensation minus three basis points and minus two basis points; preopening expense, minus two basis points and minus two basis points. Again, for a total reported margin higher minus 25 basis points year-over-year. Yes. I'm sorry SG&A net margin 25 basis points and without gas deflation higher by 19 basis points.
The core again was higher by 18 basis points and higher by 14 basis points excluding the impact from gas. This included a 12 weeks of this past March as extra top-of-scale increase in our wages, which represents an estimated two basis-point hit. And as of September 18th, we raised our starting wage in the US and Canada. That estimated impact from those new wages to be roughly two basis points as well. Again, central, nothing much to say other than it's one basis point by higher excluding gas deflation. Again, it was stock comps at the minus two basis points ex-gas deflation at preopening. We did have a couple of more openings this year in the quarter than we did last year and that was higher by two basis points.
Below the operating income line, interest expense was 38 basis points -- $38 million this year, $4 million higher than last year's $34 million per year. Interest income and other for the quarter was higher by $107 million coming in at $160 million this year versus $53 million last year. This was driven largely by the increase in interest income, about $100 million of about $107 million due to higher interest rates as well as higher cash balances. The small additional impact was a favorable FX year-over-year.
In terms of income taxes, our tax rate in the first quarter was 24.5%. This compares to 23.0% a year ago or 1.5 percentage points higher this year than last year. The increase in our rate as of Q1 -- in Q1 is primarily attributable to lower benefit from the stock-based compensation from a year ago. Overall, reported net income was up 16.5% year-over-year in the quarter.
A few other items of note. In terms of warehouse expansion in the first quarter, we opened 10 locations, including one relos. So net of nine increases. Those nine included eight in the US and one in Canada. For the full year of fiscal '24, we estimate opening, we're planning to open 33 locations, including two relos. So, for a net increase of 31 new warehouses that would be up from 23 that we opened in fiscal '23. For Q2 fiscal '24, we plan four new locations, including our six building in China early in the calendar year.
Regarding capital expenditures. First quarter capital expenditure spend was approximately 1.04 billion. We estimate that fiscal '24 capex will be in the $4.4 billion to $4.6 billion range. That's up from $4.3 billion we had in fiscal '23, reflecting a continued increase in the number of the expansion that we're doing. In terms of e-commerce business. E-com sales in Q1, ex-FX increased 6.1%. The first quarterly year-over-year increase in five fiscal quarters have trended well during the three reporting periods of September, October, November. E-com showed strength in several areas. In food, things like e-gift cards, pet items, snack items were up in the mid-teens. Appliances were up year-over-year in the mid-20s, TVs was actually in the high singles despite the challenges with other aspects of consumer electronics like computers and tires were up in the low teens. So overall, a pretty good showing there.
As well, Costco Logistics enjoyed record-breaking deliveries. In the first quarter of fiscal '24, we completed over 800,000 deliveries, which were up 17% versus the comparable quarter last year. And some fun wild items in the quarter in e-commerce. You've probably read about the fact that we're solving one-ounce gold buyers. We sold over $100 million of gold during the quarter, we sold a Baybrook autographed index for $20,000. And in addition to E-gift cards on everything from restaurants to golf to airlines, and we just in the last couple of weeks, we launched a Disney eGift Card valued at $250 for $224.99. And for you, last-minute shoppers out there, there is a Mickey Mantle autographed 1951 rookie card in nearly perfect condition and it's on sale online for $250,000.
Next, good progress continues to be made with our e-com mobile and digital efforts. No big enhancements and changes to the site, leading up to the holidays, mostly holiday prep. We did have 100%, I would say availability during Cyber Week, and sales for the Five Cyber Days Thanksgiving, Black Friday, Saturday, Sunday, and Cyber Monday were up year-over-year in the mid-teens. Our app downloads during the quarter were 234 million. So total app downloads now stand at 30.5 million or a 10% increase during the quarter and that's after a be over 40% increase in all of fiscal '23 versus the prior year. Our site traffic approaching 0.5 billion and just under 10% increase in the average order value being up about 2.5%, so continue to make progress there.
Next, a couple of comments regarding inflation, most recently in the last fourth quarter discussion we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the zero to 1% range. Bigger deflation in some big and bulky items like furniture sets due to lower freight costs year-over-year, as well as on things like domestic bulky lower-priced items. Again, where the freight cost is significant, some deflationary items were as much as 20% to 30% and again mostly freight-related. TVs, the average sale prices have been lower, while units have been higher. And in talking to the buyers overall, our inventories are SKU counts are in good shape across all channels. And so far, we've had a good seasonal sell-through during the quarter.
Lastly, as you saw in this afternoon's press release, we declared a $15 per share special cash dividend. This is our fifth special dividend in 11 years. The total payout will be about just under $6.7 billion and will be funded using existing cash and that's accompanied by any issuance of debt. The special cash dividend would paid on January 12 to shareholders of record on December 28th.
Finally, in terms of upcoming releases. We will announce our December sales results for the five weeks ending Sunday, December 31st on Thursday, January 4th, after market close.
With that, I will turn it back for Q&A to Lisa, and be happy to answer any questions.
