Costco Q1 digital sales surge; profits, revenue beats Street
Costco Wholesale Corp. reported better than expected top- and bottom-line results for its first quarter amid strong online growth.
The membership warehouse club giant's digital sales jumped 20.5% year over year, and website traffic rose 24% year over year, CFO Gary Millerchip said on the company’s earnings call. He noted that Costco’s same-day delivery service offered in partnership with Instacart in the United States and Uber Eats and DoorDash internationally also performed extremely well, growing at a faster pace than overall digital sales.
In other remarks during the call, Millerchip said that Costco had 81.4 million total paid members, up 5.2% year over year, at the end of the quarter. Membership fee income grew 14% year over year.
During the quarter, Costco opened eight warehouse club locations (including a relocation in Canada), its third location in France, four outposts in the U.S. and two Canadian business centers, CEO Ron Vachris told analysts on the call. He reaffirmed the company’s plans to open 30 or more clubs annually going forward.
First quarter
Costco’s net rose to $2 billion, or, $4.50 per share, for the quarter ended Nov. 23, compared to $1.79 billion, $4.04 per share in the year-ago period and topping Street expectations of $4.27 a share. This year’s results included a tax benefit of $72 million, $0.16 per diluted share, related to stock-based compensation, which last year was $100 million, $0.22 per diluted share.
Net sales rose 8.2% to $65.98 billion from $60.99 billion last year. Including membership fees, Costco reported revenue of $67.3 billion, just above analysts expectations of $67.14 billion. Traffic or shopping frequency rose 3.1% worldwide, up 2.6% in the U.S.. The average transaction or ticket was up 3.2% worldwide.
Total comparable sales increased 6.4%, rising 5.9% in the U.S., and 6.5% in Canada, Other international comps rose 8.8%. Total comparable sales excluding the impacts from changes in gasoline prices and foreign exchange increased 5.9% in the U.S., and 9.0% in Canada, Other international comps rose 6.8%.
Costco currently operates 923 warehouses, including 633 in the United States and Puerto Rico, 114 in Canada, 42 in Mexico, 37 in Japan, 29 in the United Kingdom, 20 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, three in France, two in Sweden, and one each in Iceland, and New Zealand. Costco also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
