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Industry NewsCostco Q3 2020: Pandemic costs cut into earnings

Costco Q3 2020: Pandemic costs cut into earnings


Costco Wholesale sales in its fiscal third quarter surged during the pandemic, but so did costs related to protective measures to fight the coronavirus, stay-at-home orders and social distancing.

Costco said it earned $838 million in the third quarter, a fall from $906 million a year ago. The retailer said additional wages and sanitation costs related to the pandemic reduced earnings by $283 million.

Sales rose 7 per cent to $36.45 billion, compared with $33.96 billion a year ago. Same-store sales rose 4.8 per cent in the quarter, with online sales spiking 65 per cent.

While sales increased in the U.S. and internationally, they were weak in Canada during the quarter falling -2.5 per cent.

During an earnings call, Richard Galanti, EVP and CFO of Costco said that the weaker traffic and slightly weaker numbers in Canada were partially due to Quebec Sunday store closing regulations and surmised that it was due in part to different lockdown measures in the country. “Canada has been stricter or maybe people are just listening more, so we’ve seen weaker performance there.”

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