Costco Raises Minimum Wage to $15 an Hour -- Update

By Sarah Nassauer and Micah Maidenberg 

Costco Wholesale Corp. said it has raised starting wages for store workers to $15 an hour, as a tight U.S. labor market continues to drive fierce competition for hourly staffers.

Executives at the Issaquah, Wash.,-based retailer, which has around 245,000 workers, said the company raised its minimum hourly wage for U.S. workers from $14 and for Canadian staff from $14 or $13, depending on the province, this week. It is the second such increase in less than a year at the company, which raised its hourly minimum from $13 last June in the U.S.

Costco will also increase pay for supervisors and has started offering paid parental leave for hourly employees, said chief financial officer Richard Galanti on a conference call to discuss quarterly earnings Thursday.

Several large employers have been raising pay to lure or keep hourly and part-time workers in a hot job market where unemployment recently touched its lowest level in decades.

Last year, Amazon.com Inc. raised its minimum U.S. wage to $15 an hour. Target Corp., which pays store workers at least $12 an hour currently, has promised to pay $15 starting next year. Walmart Inc., the biggest private U.S. employer with about 1.5 million workers, raised its starting wage to $11 last year.

The median worker at Costco was paid $38,810 last year, compared with $19,177 at Walmart and $28,446 at Amazon. ( See how your salary compares.)

Costco reported total revenue of $35.39 billion in the quarter that ended Feb. 17, compared with $32.99 billion the year earlier.

Same-store sales, or those generated at Costco warehouses and e-commerce sites operating for more than a year, rose 5.4%, boosted by 4.9% more traffic to stores and websites. Sales of fresh food and everyday household items were strong during the quarter, said Mr. Galanti. Online sales rose 20.2%, he said.

The company reported a profit of $889 million, or $2.01 a share, compared with $701 million, or $1.59 a share, the year prior. Analysts had forecast $1.69 a share, according to FactSet.

Costco shares rose 5% in after-hours trading. The stock is up 6.4% so far this year.

Write to Sarah Nassauer at [e-mail] and Micah Maidenberg at [e-mail]

(END) Dow Jones Newswires

March 18, 2019 18:05 ET (22:05 GMT)

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