Costco's March Sales Surge Amid Coronavirus Panic-Buying - Sort Of

Sales at Costco went through the flat industrial roof - but not as much as expected - as panicked shoppers lined up much less than six feet apart to stock up.

As expected, sales at Costco Wholesale  (COST) - Get Report went through the flat industrial roof last month as panicked shoppers lined up much less than six feet apart to stock up on toilet paper, canned goods and other essentials as the coronavirus made its way to North America.

The retailer’s comparable U.S. sales excluding fuel - a key metric watched by analysts - rose 12.1%, a good number but far below the 24.1% average estimate compiled by Consensus Metrix. Including fuel, total comparable sales for March came in at 9.6% vs. estimates of 19.1%, according to Consensus Metrix.

The reason for the sales miss: Not only declines in sales of other products like apparel and electronics but also limits on customer traffic, store hours and the closure of departments put a damper on overall sales, the company said on a prerecorded call on Wednesday.

Indeed, while a near-record for the Issaquah, Washington-based retailer, the numbers were about half of what analysts and investors were expecting - not to mention what anyone who entered Costco’s doors last month might have thought. 

Along with Walmart  (WMT) - Get Report , Costco has been one of the primary beneficiaries of consumer stockpiling in recent weeks as housebound shoppers scoop up toilet paper, cereal and other everyday essentials. Sales in Walmart’s U.S. stores rose 17% over the past four weeks, according to internal documents seen by Bloomberg.

Both stores have taken steps to keep customers and employees safe, such as checkout-line markers to maintain distance between shoppers and limits on how many shoppers can enter a store at one time.

Compared with Walmart, however, Costco’s locations are more concentrated in regions more adversely impacted by the coronavirus, suggesting they should have benefitted more, according to analysts at UBS.

Shares of Costco were down 1.29% at $302.03 in trading on Thursday. Shares of Walmart were down 0.80% at $120.77.