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Costco Shares Surpass Expectations, COVID Costs High

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Costco Wholesale Corp recorded high coronavirus-related costs for the second quarter that is right overshadowing its better-than-expected results and sending the company’s shares down 3% in extended trading on Thursday.

The warehouse chain spent about $281 million on employee bonuses and sanitizing its warehouses in the quarter that is fourth mirroring a trend of increasing costs across U.S. retailers throughout the wellness crisis.

Costco had estimated in May that COVID-19-realted costs would exceed $100 million, but could be reduced than the $283 million incurred in the quarter that is prior.

“$281 million is over $100 million but a great deal bigger,” Chief Financial Officer Richard Galanti said on an earnings call.

The business cited the $ premium that is 2-an-hour to workers as a factor for the jump in costs. The bonus costs Costco $14 million a week.

“We’ve committed to doing that at least through, in my opinion, the first eight weeks of this quarter that is financial” Galanti said.

Several U.S. retailers, including Kroger Co (N:KR) and Amazon.com Inc (O:AMZN), have come under fire for stopping risk pay for their employees.

Higher demand for fresh produce, appliances and gardening and sports helped Costco’s total revenue climb 12.4% to $53.38 billion into the quarter ended Aug. 30, beating the estimate that is average of52.08 billion, according to Refinitiv data. Costco Wholesale Corp recorded high coronavirus-related costs.

Traffic at the warehouse chain, where customers typically buy items in bulk at lower prices, also ticked up within the quarter, after decreasing about 20% in, as COVID-19 restrictions eased and it brought back meals samples April.

Revenue from memberships rose 5.3% to $1.11 billion, while online sales nearly doubled.

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Justin N. Richards

Justin N. Richards is a Florida-based technical analyst, market researcher, educator, and trader. Justin began his career in Chicago in 2001 performing futures market analysis for floor traders at the Chicago Board of Trade and the Chicago Mercantile Exchange. He also worked for numerous brokerage firms during that time, all of which hold him in high regard, and he has been providing outstanding analysis services for traders worldwide ever since. Mr. Richards is an expert in the area of market patterns, price and time analysis as it applies to futures, Forex, and stocks. In addition to these talents, he provides educational services for investors looking to improve their analysis and trade skills. Justin has a B.A. in Business Administration from UCLA and an M.S. in Financial Markets and Trading from the Illinois Institute of Technology. Justin’s professional experience, education, and discipline, not only make him an exceptional analyst, they point him out as a reliable, hard working and intelligent business strategist who is dedicated to his craft.
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