Costco Wholesale Corp. (NASDAQ:COST) topped Wall Street estimates during its fiscal first quarter amid continued strong demand for food and supplies.
Costco’s profit climbed to $2.62 U.S. a share in the period ended November 22, the company said Thursday after markets closed. Analysts had expected $2.06 U.S. a share, on average, according to estimates compiled by Refinitiv.
Costco has experienced continued strong demand as consumers stock up on bulk food, along with electronics and goods for the home. Despite signs the pantry-loading trend may wane with a COVID-19 vaccine, the pandemic has been a boon for retailers and warehouse clubs, including Costco, that carry quarantine-friendly items such as canned goods and rice.
Sales from membership fees climbed 7.1% in the quarter. The company incurred $212 million U.S. in costs during the quarter related to higher wages paid during the pandemic. Costco said earlier this year that it would pay employees an extra $2 U.S. an hour, and has been incurring higher expenses related to e-commerce.
The company’s gross margin was 13.3% in the period, compared with analysts’ estimate of 11.15%. Costco shares rose less than 1% after regular trading in New York Thursday. Costco’s stock has climbed 27% this year, roughly double the gain of the S&P 500 Index.