Costco Sales Rise 15% in Latest Quarter -- Update
By Kimberly Chin
Costco Wholesale Corp.'s sales climbed again in the latest
quarter as Americans continue to shop for food and goods for the
home during the pandemic.
The wholesale retail chain's revenue rose to $44.77 billion in
the quarter ended Feb. 14, a 15% increase from the year-earlier
period, driven by strong demand for fresh food and household goods
and topping analysts' projections of $43.7 billion.
Comparable sales, at stores or digital channels operating for at
least 12 months, increased 12.9% during the February quarter,
excluding the impact of gasoline sales and currency movements. The
retailer's e-commerce sales rose 74.8% from the prior year as
The average ticket size increased 11.9% company-wide.
The company experienced some supply-chain challenges in the
quarter regarding container shortages and port delays, which led to
delays in furniture, sporting goods and sundry items like seafood,
imported cheeses and oils.
"We expect these pressures to ease in the coming months, but
it's impacting everyone," Chief Financial Officer Richard Galanti
said on a call with analysts Thursday. The cost to the company per
shipping container is up 10% to 15%, Mr. Galanti estimated on the
Overall the company said it had some pressure to keep shelves
stocked with electronics, such as TVs, computers and smart home
devices due to chip shortages, and with canned beverages due to
The quarter's results included a strong December period. The
company's net sales for the five-week period ended Jan. 3 increased
12% to $19.14 billion versus a year ago.
Big-box retailers including Walmart Inc. and Target Corp. have
generally fared well amid the coronavirus crisis, selling items
that pandemic-weary shoppers are buying more of, such as food and
home goods. In general, large retailers and grocers have remained
open throughout the pandemic, avoiding early lockdown closures.
Costco recorded a profit of $951 million, or $2.14 a share, for
the quarter, up from $931 million, or $2.10 a share, in the
comparable period last year. Analysts were targeting $2.45 a share.
This included $246 million in pretax costs primarily related to
premium wages paid during the Covid-19 pandemic.
For the quarter, the company reported selling, general and
administrative expenses of $4.34 billion, up 16% from a year
The company boosted its pay for its U.S. workers to at least $16
an hour beginning this month. Costco has long paid its store
workers more than most competitors, in part to reduce turnover as
part of its low-cost operating model. Its minimum U.S. wage has
been $15 an hour, the same as the starting wage at Amazon.com Inc.
and Target. Costco has about 180,000 full-time and part-time U.S.
Costco said it spent around $1.1 billion on Covid-19 related
expenses between March last year and February this year, with the
majority going to a $2 an hour pay boost for store workers, Mr.
Galanti said. Going forward, with the permanent pay increase in
place, the roughly $1 billion expense will fall to about $500
million for the current year, he said.
Write to Kimberly Chin at firstname.lastname@example.org
(END) Dow Jones Newswires
March 04, 2021 18:23 ET (23:23 GMT)
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