Costco Q4 profits rise, helped by pandemic shopping habits

ISSAQUAH, WASHINGTON (AP) — Warehouse retail chain Costco Wholesale said its fourth-quarter (Q4) profits rose slightly from a year ago, its profits weighed by wage premiums paid to employees during the pandemic.

In a quarter during which Costco saw a surge of online shopping, the company based in Issaquah, Washington, said it earned USD951 million, or USD2.14 per share. That’s compared to a profit of USD931 million, or USD2.10 per share, in the same period a year earlier.

But the results were below analysts’ expectations, pushing the Costco’s stock down about two per cent in after-hours trading.

The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of USD2.42 per share in the latest quarter.

Costco said the premium COVID-19 pay for its employees trimmed its profits by 41 cents per share.

Costco has been one retailer that has mostly benefitted from the pandemic, as stay-at-home Americans stocked up on bulk goods. The company also is seeing a jump in online shopping, notable for the chain mostly known for its mammoth warehouse stores.

E-commerce revenues were up 75 per cent from a year earlier in the quarter that ended on February 14.

The warehouse club operator posted total revenue of USD44.77 billion in the period, exceeding Street forecasts. Six analysts surveyed by Zacks expected USD44.5 billion.

Shoppers walk into a Costco store in Tacoma, Washington. PHOTO: AP