Costco Q1 earnings jump; posts double-digit comp sales

Costco Wholesale Corp. came out of the gate strong in its first quarter as consumers continue to spend more on food and home goods amid the pandemic.

Costco earned $1.166 billion, or $2.62 per share, in the quarter ended Nov.22, compared with $844 million, or $1.90 a share, in the year-ago period. The results included tax benefits of $145 million and a $212 million pre-tax expense of COVID-19-related premium wages. Excluding items, it earned $2.30 per share. Analysts had expected earnings of $2.07 a share.

Net sales rose 16.9% to $42.35 billion. Total revenue, which include membership fees, rose to $43.2 billion.

Total company same-store sales rose 15.4% in the quarter.  Online comp sales rose 86.4%. 

On the retailer’s earnings call, CFO Richard Galanti said that people have redirected some spending previously earmarked for travel, hotel and dining out to purchases including electronics, furniture and mattresses. In addition, the company benefitted from higher productivity.

Costco currently operates 803 warehouses, including 558 in the United States and Puerto Rico, 102 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in Korea, 14 in Taiwan, 12 in Australia, three in Spain, and one each in Iceland, France, and China. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia.