Sun, May 19, 2024

Costco’s Sales Increased in the Fiscal Third Quarter

Costco and financial results

Costco Wholesale Corporation is one of the largest corporations in the United States when it comes to total revenue. On Thursday, Costco released information about the fiscal third quarter. Interestingly, sales grew in the quarter despite the coronavirus pandemic. However, the stay-at-home orders influenced the growth.

Let’s have a look at the results. The fiscal third quarter ended on May 10. In March, a lot of people visited Costco’s warehouses to buy essentials such as large cleaning supplies and groceries. Moreover, its same-store sales grew by 9.6% for the five-week period that ended April 5 compared with the same period in 2019.

However, the number of people who bought products in Costco declined in April, as many people decided not to leave their houses. Last month, stay-at-home orders, as well as social distancing requirements and some mandatory closures, affected its sales. As a result, same-store sales declined by 4.7% globally for the four weeks that ended May 3.

Costco and interesting details

Costco and interesting details

However, same-store sales in the fiscal third quarter failed to meet analysts’ expectations. They expected same-store sales to increase by 5.6%. However, sales rose by 4.8%. Moreover, even though sales grew, costs were higher due to the coronavirus pandemic.

Unfortunately, net income fell to $838 million or $1.89 per share. For example, in 2019 net income was $906 million or $2.05 per share. Moreover, additional wages and sanitation costs related to the pandemic reduced earnings by $283 million or 47 cents per share, on a pretax basis.

It is worth noting that other factors also affected Costco’s profits. Interestingly, during the pandemic, customers started to buy more food and fewer discretionary items, such as luggage and jewelry.

Notably, its e-commerce sales jumped by 64.5% for the fiscal third quarter, compared with the same period in 2019. Moreover, compared with 2019 the total revenue increased significantly to $37.27 billion.

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