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Shares of the warehouse club operator fell about 2% in extended
trading.
The gains from the unprecedented demand for essentials during
the coronavirus outbreak were countered by the company halting
sale of items such as hearing aids, opticals and jewelry in
certain stores and closing dine-in areas at its food courts.
Costco's gasoline business also took a hit as customers traveled
less due to the months-long lockdown, while sales of
discretionary products such as luggage and apparel fell.
The members-only retailer recorded a $283 million charge in the
third quarter and warned that it expected coronavirus-related
expenses to exceed $100 million in the current quarter.
However, Costco, deemed an essential retailer during the
lockdown, beat quarterly revenue estimates as people stocked up
on basic goods such as paper towels and cleaning supplies before
hunkering down in their homes to contain the spread of the
virus.
E-commerce sales surged 66.1% on an adjusted basis, as consumers
avoided in-person shopping and opted instead to use the option
of same-day grocery delivery and facility to pick up online
orders at local Costco stores.
Revenue from its high-margin memberships, which ranges between
$60 and $120 per annum, rose 5% to $815 million.
Total revenue rose 7.3% to $37.27 billion in the third quarter,
beating estimates of $37.13 billion, according to IBES data from
Refinitiv.
Net income attributable to Costco fell to $838 million, or $1.89
per share, in the quarter ended May 10, from $906 million, or
$2.05 per share, a year earlier.
Analysts on average were expecting it to earn $1.95 per share.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Amy
Caren Daniel)
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