Costco Profit Trails Analyst Forecasts Amid Pandemic

Premium wages cut into returns for latest quarter at warehouse store operator.
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Costco  (COST) - Get Report reported lower-than-expected profit for the latest quarter, hurt by the continuing effects of the COVID pandemic.

For the fiscal 2021 second quarter ended Feb. 4, net income totaled $951 million, or $2.14 per share, up from $931 million, or $2.10 per share, a year ago. The total includes $246 million, or 41 cents a share, in pre-tax costs incurred primarily from premium wages for the COVID pandemic, the company said.

Analysts forecast a profit of $2.45 per share for the latest quarter.

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Issaquah, Wash.-based Costco’s sales registered $43.89 billion in the most recent quarter, up 14.7% from $38.26 billion last year. The latest figure beat the FactSet analyst consensus of $43.75 billion. Comparable sales gained 12.9%, beating the analyst forecast of 10.8%.

Costco also reported that net sales jumped 15% to $14.05 billion in all of February from a year earlier.

The stock recently stood at $315.71, down 1.04%. It slid 5% in the past year through Thursday’s close, as the COVID pandemic kept many shoppers at home.

Costco Chief Executive Craig Jelinek said last week that the company would start raising its minimum wage to $16 an hour this week, putting it above many competitors. It pays about 20% of its workers the minimum. It previously pulled its minimum wage to $14 in 2018 and to $15 in 2019, CNN reported.

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