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.