Costco Wholesale reported quarterly revenue and profit that topped Wall Street expectations as consumers purchased more groceries and splurged on high-margin items.
Shares of Costco fell about 1% in extended trading as same-store sales growth slowed in February.
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Comparable sales, excluding the impact of fuel and currency fluctuations, jumped 11.1% in the second quarter, compared with Refinitiv IBES estimates of an 8.74% rise.
Like many retailers, Costco has had challenges including port delays, container shortages, COVID-19 disruptions, shortages of various components and labor cost pressures.
“Overall, we’ve done a pretty good job of giving the supply chain challenges. I think that’s evidenced in our sales strength,” said Chief Financial Officer Richard Galanti. “They continue to be delayed to container arrivals, so we continue to advance order in many cases as we are able to.”
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Galanti said that virtually all departments are impacted with less product as well as packaging challenges.
“One of the things that we’ve done that I mentioned last quarter, I mentioned we had chartered three small container vessels to help provide us with additional flexibility on shipping,” said Galanti. “We have now charged a total of seven ocean vessels, up from those three – for the next three years. And these are the transport ‘containers between Asia and the US and Canada.”
|COST||COSTCO WHOLESALE CORP.||525.50||-7.55||-1.42%|
During the earnings call on Thursday, Galanti also mentioned the impact on inflation.
“The inflationary pressures that we and others continue to see include higher labor costs, higher freight costs as well as higher transportation demand,” said Galanti. “Not very different than what you hear and read and see from others. But again, we think we’ve done a pretty good job of corralling it as best we can.”
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Total revenue rose 16% to $51.90 billion in the second quarter from a year earlier, topping expectations.
Net income rose to $1.30 billion, or $2.92 per share, from $951 million, or $2.14 per share, a year earlier. Analysts were expecting a profit of $2.74 per share.