Costco Wholesale Corp.’s latest quarterly sales results were slightly ahead of analyst projections. Growth in online business was the slowest it has been in a year and gross margins fell thanks to rising costs and higher investments.
Costco has been making significant investments in e-commerce and delivery operations, while offering same-day and two-day grocery delivery with Instacart, Reuters says.
“We’re not only investing in price, we’re investing in infrastructure,” said CEO Richard Galanti on a conference call with analysts, adding the retailer would be “doubling down” its spending on IT and fulfillment centres.
Comparable online sales for the quarter grew 26.2 percent, the slowest in a year as the company faced competition from Amazon’s Whole Foods division. Adjusted same-store sales rose 7.2 per cent, slightly ahead of the projected 6.4 per cent increase.
Costco comparable sales for the 16-week fourth quarter, and the 52-week fiscal year, ended September 2, 2018, were as follows:
Comparable sales for these periods excluding the impacts from changes in gasoline prices and foreign exchange were as follows:
Read the Reuters story here.