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

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.

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.