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Costco beats estimates as shoppers flock back to stores -Breaking


© Reuters. Customers line up to go into Costco Wholesalers, Chingford. Britain. March 15, 2020. REUTERS/John Sibley

(Reuters] – Costco Wholesale Corp. (NASDAQ:) beat Wall Street estimates on Thursday for its quarterly revenue, profit and margins. This was because consumers returned to Costco’s stores purchased more groceries and indulged in high-end items such as jewellery and home furnishing.

Costco has seen its sales increase, which is heavily dependent on treasure-hunting customers who visit the warehouses to shop.

Even after the reopenings of outdoor restaurants and eateries, pandemic-induced consumer habits such as cooking and eating out more often at home have remained, which has boosted sales at Costco and Kroger. (NYSE:) Co.

As travel and social events resumed in the last few months, there has been a strong demand for high margin items. This has boosted sales at retailers.

The company stated that it is still under pressure from container delays and higher labor and freight cost, as well as chip shortages which are affecting deliveries.

Richard Galanti, Chief Financial Officer said that “despite all the supply chain problems we are staying in stock” and continued to strive to reduce cost and price rises as much as possible.

Comparable sales increased 11.1% in second quarter, after adjusting for fuel and currency fluctuations. Refinitiv IBES predictions of an 8.74% jump were not accurate.

The second quarter’s total revenue grew 16% to $51.90billion, an increase of 16% over the previous year. On average, analysts had predicted $51.47 billion.

From $951 million or $2.14 per shares a year ago, net income increased to $1.30 Billion, or 2.92 per share in the quarter that ended February 13. Analysts expected it to post profit of $2.74 per shares.

However, the shares of this retailer dropped about 1% in extended trades as February’s same-store sales growth slowed down to 10.6% from 10.8% in January.

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