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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Costco Wholesale Corporation    COST

COSTCO WHOLESALE CORPORATION

(COST)
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Costco beats estimates as high COVID-19 costs weigh on shares

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09/24/2020 | 06:39pm EDT
The spread of the coronavirus disease (COVID-19) in Pennsylvania

Costco Wholesale Corp recorded high coronavirus-related costs for the second straight quarter, overshadowing its better-than-expected results and sending the company's shares down 3% in extended trading on Thursday.

The warehouse chain spent about $281 million on employee bonuses and sanitizing its warehouses in the fourth quarter, mirroring a trend of rising costs across U.S. retailers during the health crisis.

Costco had estimated in May that COVID-19-realted costs would exceed $100 million, but would be lower than the $283 million incurred in the prior quarter.

"$281 million is over $100 million but quite a bit larger," Chief Financial Officer Richard Galanti said on an earnings call.

The company cited the $2-an-hour premium paid to employees as a factor for the jump in costs. The bonus costs Costco $14 million a week.

"We've committed to doing that at least through, I believe, the first eight weeks of this fiscal quarter," Galanti said.

Several U.S. retailers, including Kroger Co and Amazon.com Inc, have come under fire for stopping hazard pay for their workers.

Higher demand for fresh produce, appliances and gardening and sporting goods helped Costco's total revenue climb 12.4% to $53.38 billion in the quarter ended Aug. 30, beating the average estimate of $52.08 billion, according to Refinitiv data.

Traffic at the warehouse chain, where customers typically buy items in bulk at lower prices, also ticked up in the quarter, after declining about 20% in April, as COVID-19 restrictions eased and it brought back food samples.

Revenue from memberships rose 5.3% to $1.11 billion, while online sales nearly doubled.

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

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Aditya Soni)


Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM, INC. 1.58% 3263.61 Delayed Quote.73.57%
COSTCO WHOLESALE CORPORATION 1.66% 381.96 Delayed Quote.27.78%
KROGER -0.47% 33.72 Delayed Quote.16.87%
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Financials (USD)
Sales 2021 179 B - -
Net income 2021 4 236 M - -
Net cash 2021 3 680 M - -
P/E ratio 2021 38,8x
Yield 2021 0,77%
Capitalization 166 B 166 B -
EV / Sales 2021 0,91x
EV / Sales 2022 0,83x
Nbr of Employees 214 500
Free-Float 99,8%
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Technical analysis trends COSTCO WHOLESALE CORPORATION
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 33
Average target price 371,82 $
Last Close Price 375,56 $
Spread / Highest target 15,8%
Spread / Average Target -1,00%
Spread / Lowest Target -37,4%
EPS Revisions
Managers
NameTitle
Walter Craig Jelinek President, Chief Executive Officer & Director
Hamilton Evans James Non-Executive Chairman
James Patrick Murphy Chief Operating Officer-International & EVP
Richard A. Galanti Chief Financial Officer, Director & Executive VP
Paul G. Moulton Chief Information Officer & Executive VP
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