Costco reports better than expected sales as consumers stock up to prepare for Coronavirus impact

Costco reports better than expected sales as consumers stock up to prepare for Coronavirus impact
Written by:
Michael Harris
7th March, 13:40
Updated: 11th March, 08:52
  • Costco reports better than expected sales as consumers stock up to prepare for Coronavirus impact.
  • Costco posts an 8.9% increase in its same-store sales in the fiscal second quarter.
  • CFO Richard Galanti says the wholesaler is committed to cater to the rising demand.

In its report on Thursday, Costco announced better sales than what the experts had forecast. The company said that the rapid spread of Coronavirus increased traffic to its stores as consumers wished to stock up to better prepare against the health emergency.

In terms of monthly same-store sales, the company attributed a 3% increase to the virus outbreak. All in all, its same-store sales were seen 12.1% higher in February.  

Costco Is Working Committedly To Cope-Up With The Rising Demand

According to Costco, the maximum traffic at its countrywide stores was seen last weekend that extended further into the week as well. Items like paper towels, water, sanitizing wipes and a range of other household goods were reported the greatest in demand.

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The company also highlighted that despite daily deliveries, it is getting hard for the wholesaler to cope up with the rising demand that saw a few of its stores putting a purchase limit on customers. Costco further added that it is working committedly to address the issues of stock shortage at its stores especially in household and grocery items.

In the fiscal second quarter, Costco boasted an 8.9% increase in its same-store sales that covers data from its traditional stores as well as the online unit. Excluding the effect of currency fluctuations and gasoline prices, the company reported the increase at 7.9% in the recent quarter.

CFO Richard Galanti also commented on Thursday and reiterated that so far, March is also continuing the trend of sharply higher sales. But it is not yet possible, he added, to quantify how the virus outbreak will impact its financial results in the upcoming months.

Costco’s Performance In The Stock Market

Galanti also reported increased sales in more expensive items including patio furniture. Such a trend, he remarked, is likely to result in a larger push to sales figures in the future. The supply chain disruptions, however, continue to weigh on its regional performance specifically in China, according to the CFO.

At the time of writing, Costco is exchanging hands at around $310 per share that marks just under 7% growth in 2020 so far. Its performance in 2019, on the contrary, remained largely upbeat in the stock market with an annual gain of around 45%. Costco opened at around $204 per share in January 2019 but closed the year significantly higher at around $293. The American multinational corporation currently has a market cap of $137.54 billion.

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