Costco Reports 9.6% Comparable Sales Increase in March, Short of Wall Street Projections

By Maria Armental

Costco Wholesale Corp. reported a smaller-than-expected 9.6% comparable-sales increase in March, delivering a sobering reality check that sent the stock down in after-hours trading.

Shares, which have been trading near record levels, fell 3.5% to $295.20 in after-hours trading Wednesday.

The warehouse operator and other companies that offer essential services, such as food and gasoline, have remained open during the coronavirus pandemic and have reported higher sales of certain products such as paper goods as nervous shoppers stocked up.

Last week, The Wall Street Journal reported Walmart Inc.'s sales in the U.S. over the past four weeks rose nearly 20% from the comparable period a year earlier.

Costco had reported a nearly 14% sales increase in February and 12% rise in comparable sales, a closely watched measure that excludes the impact from locations that were opened or closed within the year. The company said it had seen higher demand in the final week of the month as concerns about the coronavirus mounted.

The U.S. has since become a hotspot of the global pandemic, with some 400,000 confirmed cases and 13,000 deaths linked to the virus, according to a Johns Hopskins University tally.

On Wednesday, Costco reported $15.49 billion in net sales for the five weeks ended April 5, up 12% from last year, while comparable sales rose 9.6%. Analysts surveyed by Consensus Metrix expected a 19% increase.

The company, which has more than 780 warehouses, has put in place temporary restrictions during the pandemic, including setting aside a shopping time for those 60 or older and giving priority access to health-care workers and first responders like police officers, EMTs and firefighters.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

April 08, 2020 16:51 ET (20:51 GMT)

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