By Sarah Nassauer and Patrick Thomas 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 14, 2018).

Costco Wholesale Corp. sales surged in its latest quarter, as the warehouse chain continued to benefit from a strong economy and shopper interest in everything from bulk toilet paper to discounted branded clothes.

Same-store sales, which the company defines as those at stores open for more than a year, grew 8.8% in the quarter, on par with what analysts expected and driven by an 11% comparable-sales increase in the U.S.

Traffic rose 4.9% in the quarter.

Costco has reported robust quarterly sales in recent years, even as other retailers floundered in the face of online competition. That strength has continued as a fairly robust economy helps shore up sales at a wider swath of retailers, including Walmart Inc., Target Corp. and Macy's Inc. in recent quarters.

Some investors have worried Costco will eventually face stiff competition from Amazon.com Inc. Costco has expanded its online offerings, adding more products for sales online and last year introducing same-day grocery delivery from its website through a partnership with Instacart, a startup that delivers groceries from multiple retailers. E-commerce sales were up 26%.

The company has felt pressure to lower prices on fresh food from competitors in recent quarters, including grocers and Sam's Club, the warehouse chain owned by Walmart, said company chief financial officer Richard Galanti on a call with analysts Thursday. "But that's part of the business," he said.

Overall, the Issaquah, Wash.-based company reported a profit of $767 million, or $1.73 cents a share, compared with $640 million, or $1.45 a share, a year ago. Analysts polled by FactSet were expecting earnings of $1.62 a share. The company's first-quarter results included $86 million of tax benefits, as well as a $43 million charge related to its Citi/Visa co-branded credit card program.

Sales were up more than 10% at $34.3 billion. Analysts polled by FactSet had expected $37.6 billion in sales in the quarter.

Shares of the company fell about 3% in after-hours trading. The stock is up 21% so far this year through Thursday's close.

Write to Sarah Nassauer at sarah.nassauer@wsj.com

 

(END) Dow Jones Newswires

December 14, 2018 02:47 ET (07:47 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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