Costco's sales and profits grew at double-digit rates

Costco's sales and profits grew at double-digit rates

Recent data shows that Costco issued $1306.1 million in invoices in the first nine months of this fiscal year, an increase of 17.7% compared with the same period last year. On a comparable basis, its increase was 16.3%. At the same time, its online transactions increased by 65.1% .

 

Costco is the largest chain of membership warehouse stores in the United States . It is the founder of membership warehouse wholesale clubs and is famous for its low prices and high quality . Currently , Costco has 809 sales points in 13 countries . Most of the sales come from the United States (73%) and Canada (13%).  

 

By region, Costco's like-for-like business in the United States grew 14.7% in the first three quarters of this fiscal year, with a 20.2% increase in the Canadian market and a 21.1% increase in other international markets. At the same time , the company's e-commerce business also grew 65.1% during this period .

 

In the fiscal third quarter, the US retailer's revenue increased 21.7% to $44.38 billion, while net profit increased by $1.22 billion , a growth of 45.6%.

 

E-commerce development and rising inflation

 

Costco has achieved huge growth with a fairly basic business model. Its comparable sales (which strip out more volatile fuel sales) rose 15%. Comparable sales growth is a key metric that measures revenue growth at Costco's warehouses and e-commerce sites that have been operating for at least a year.

 

Costco e-commerce sales increased 38.2% year-over-year in the fiscal third quarter (excluding foreign exchange) . U.S. e-commerce sales of these items increased 53% in the quarter . Costco Logistics fulfills approximately 70% of U.S. large and bulk orders, and the company continues to add some new large and bulk suppliers.

 

With the economic recovery and widespread distribution of vaccines, U.S. consumer demand is picking up, and retail prices are rising in sync with the recovery in demand.

 

Costco Chief Financial Officer Richard Galanti said that was partly because suppliers were paying more for containers and shipping as demand rebounded, while the cost of manufacturing consumer goods, from paper products, clothing, plastics such as cups and plants to fresh meat and imported cheese, was rising as inflation soared.

 

Inflation factors abound, and some other retailers are also facing challenges of insufficient supply of popular goods amid rising demand and global supply chain disruptions. Galanti said the company is working to control costs and reduce supply chain pressures by purchasing inventory in advance.

 

 

 


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