Costco Beats Estimates on Pandemic Boost

Costco Beats Estimates on Pandemic Boost
Cars fill the parking lot of an open Costco near the King of Prussia Mall in Upper Merion Township, Penn., on May 21, 2020. (Lucas Jackson/Reuters)

Costco Wholesale Corp beat estimates for quarterly profit and revenue on Thursday, as consumers staying at home due to the COVID-19 pandemic bought more fresh produce, appliances, and gardening and sporting goods.

Walmart Inc, Target Corp, and other U.S. retailers have seen a surge in demand for video games and home decor as some Americans use their stimulus checks to buy items considered non-essential.

Traffic at Costco stores also ticked up in the fourth quarter ended Aug. 30, after declining as much as about 20 percent in April, as government-imposed coronavirus restrictions eased and it brought back food samples.

Revenue from memberships, which range between $60 and $120 per year and account for most of Costco's gross margin, rose to $1.11 billion from $1.05 billion.

Total revenue rose 12.4 percent to $53.38 billion, exceeding the average expectation of $52.08 billion, according to IBES data from Refinitiv.

Excluding items, Costco earned $3.04 per share, beating estimates of $2.84 per share.

The company recorded $281 million in COVID-19-related costs as it spent more on employee bonuses and sanitation.

It had earlier projected COVID-19-related costs to exceed $100 million, but had said they would be lower than the $283 million recorded in the third quarter.

Shares of Issaquah, Washington state-based Costco, which have gained about 18 percent this year, were down 2 percent in extended trading.

By Praveen Paramasivam 
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