Costco Beats Wall Street Estimates as E-commerce Sales Jump
Costco reported strong quarterly earnings and sales, beating Wall Street’s expectations as e-commerce sales jumped and shoppers bought jewelry, luggage, and furniture. The membership-based warehouse club’s net income rose to $1.80 billion, or $4.04 per share, from $1.59 billion, or $3.58 per share in the year-ago period.
Revenue increased to $62.15 billion from $57.80 billion in the year-ago period. E-commerce sales rose 13% compared to the year-ago period, with the company shipping big and bulky items and hitting a new record of nearly 1 million deliveries in the quarter.
Costco’s strong sales of meat and produce indicate that shoppers are dining out less and cooking at home more. The company’s private label brand, Kirkland Signature, is growing faster than the total business, and Costco has been able to cut prices on some items, such as Kirkland’s organic peanut butter.
The company’s membership fee revenue came in at $1.17 billion, compared to the $1.16 billion Wall Street had expected. It jumped by almost 8% year over year, excluding the impact of foreign exchange rates. Comparable sales for the company increased 5.2% year over year, with customers visiting Costco’s stores and website more during the quarter.
Traffic rose 5.1% globally and 4.9% in the U.S., with the company’s average ticket up 0.1% worldwide and 0.3% in the U.S. Gold and jewelry, gift cards, home furnishings, sporting goods, health and beauty aids, luggage kiosk, and hardware were all up double digits year over year.
Costco opened seven new clubs in the quarter and plans to open 29 during the fiscal year, including three relocations. The company has a total of nearly 900 clubs, with 617 in the U.S. and Puerto Rico. As of Thursday’s close, shares of Costco are up nearly 50% so far this year, surpassing the 27% gains of the S&P 500 during the same period.
