Operator of Costco Wholesale Corp (NASDAQ: COST), the largest network of club stores in the United States. In the fourth fiscal quarter, increased revenue and bottom line as shoppers continued to stock up on everyday items amid the continued spread of COVID-19.
According to a press release from Costco, its net profit for the quarter ended August 30 rose 26% to $ 1.39 billion, or $ 3.13 per share, from $ 1.1 billion, or $ 2.47 per share. share for the same period last year. Costco's revenue grew by 14% – from $ 47.5 billion to $ 53.38 billion.
Analysts polled by FactSet had an average forecast of $ 2.8 per share in earnings on $ 52.1 billion in revenue.
Costco's like-for-like sales rose 14.1% last quarter, excluding changes in gasoline prices and foreign exchange rates. Based on this, Costco's sales growth was almost double that of the third quarter, when the company had to impose restrictions on sales due to shortages of certain products, The Wall Street Journal notes.
“As people spend less on travel and outing to cafes and restaurants, they seem to have redirected some of that spending,” Costco Chief Financial Officer Richard Galanti said during a conference call on Thursday. He noted that the company was surprised by the high level of demand in non-food categories, including household goods and furniture.
According to him, food products are sold so quickly that they do not have time to deteriorate and cause losses, so profits have increased greatly. He also noted that stocks in warehouses have stabilized, but in some areas it is still difficult to find a number of goods, including disposable gloves and disinfectant wipes. Sales of Halloween merchandise, including costumes, declined. Some clients re-book trips through the company, but mostly those that will not take place soon.
Like the stores of rival retailer Walmart (NYSE: WMT), Costco stores remained largely open throughout the pandemic as the company was viewed by the municipal government as a vital retailer. Since May, Costco has almost returned to the usual operation for customers and employees, obliging them to wear masks.
Costco's online sales last quarter grew 93% year-over-year, a big leap for a company that has been slow to go online and is building its wholesale buying business. Daily fresh food delivery has more than tripled as some people do not go to supermarkets, Galanti said.
Walmart and Costco have expanded their grocery delivery options. While Walmart built its own delivery service, Costco turned to US-based food delivery company Instacart.
Costco, which has 795 stores in the United States, Canada and several other countries, also resumed services that were temporarily suspended, including the sale of glasses and food courts.
According to analysts, Costco is benefiting from increased consumer spending among its fairly wealthy mainstream customers. They pay a membership fee of $ 60 or $ 120 per year to gain access to merchandise that are sold in bulk and often at lower prices than the competition. This tends to attract more affluent buyers.