Costco Rides High on Strong Economy -- WSJ
December 14 2018 - 3:02AM
Dow Jones News
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)
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