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Costco beats estimates on pandemic boost

Costco beats estimates on pandemic boost

FILE PHOTO: Cars fill the parking lot of an open Costco near the King of Prussia Mall which remains closed due to the ongoing outbreak of the coronavirus disease (COVID-19) in Upper Merion Township, Pennsylvania U.S., May 21, 2020. REUTERS/Lucas Jackson

REUTERS: Costco Wholesale Corp beat estimates for quarterly profit and revenue on Thursday, as consumers staying at home due to the COVID-19 pandemic bought more fresh produce, appliances and gardening and sporting goods.

Walmart Inc , Target Corp and other U.S. retailers have seen a surge in demand for video games and home decor as some Americans use their stimulus checks to buy non-essential items.

Traffic at Costco stores also ticked up in the fourth quarter ended Aug. 30, after declining as much as about 20per cent in April, as government-imposed coronavirus restrictions eased and it brought back food samples.

Revenue from memberships, which range between US$60 and US$120 per year and account for most of Costco's gross margin, rose to US$1.11 billion from US$1.05 billion.

Total revenue rose 12.4per cent to US$53.38 billion, exceeding the average expectation of US$52.08 billion, according to IBES data from Refinitiv.

Excluding items, Costco earned US$3.04 per share, beating estimates of US$2.84 per share.

The company recorded US$281 million in COVID-19-related costs as it spent more on employee bonuses and sanitation.

It had earlier projected COVID-19-related costs to exceed US$100 million, but had said they would be lower than the US$283 million recorded in the third quarter.

Shares of Issaquah, Washington-based Costco, which have gained about 18per cent this year, were down 2per cent in extended trading.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Aditya Soni)

Source: Reuters

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