Costco Keeps Drawing Homebound Shoppers

By Sarah Nassauer 

Costco Wholesale Corp. reported strong quarterly sales Thursday as homebound Americans continue to spend more on food, homegoods and fitness products during the pandemic, especially the high-income shoppers that make up much of the warehouse chain's shopper base.

Comparable sales, those from stores or digital channels operating for at least 12 months, rose 17.1% during the quarter ended Nov. 22, excluding the impact of gasoline sales and currency movements. The retailer's e-commerce sales jumped 86% in the quarter.

Big-box retailers including Walmart Inc. and Target Corp. have generally fared well amid the coronavirus crisis, offering pandemic-weary shoppers one-stop shopping and in some cases, easy buy online, pick up in store parking lot options.

Costco's shoppers, who pay a membership fee to shop, are spending less on travel and eating out during the pandemic and more on food, appliances, homegoods and other items, said finance chief Richard Galanti on a call with analysts Thursday. "They seem to have redirected some of those dollars," he said.

Profits also rose during the quarter to $1.17 billion, up from $844 million in the same period last year. Costco raised wages during the quarter due to Covid-19, adding about $212 million in costs for the period, said Mr. Galanti. But the company boosted profits elsewhere, for example selling more food by reducing spoilage, he said.

Revenue grew to $43.2 billion in the quarter, from $37 billion a year earlier.

Write to Sarah Nassauer at [e-mail]

(END) Dow Jones Newswires

December 10, 2020 18:39 ET (23:39 GMT)

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