$Costco(COST.US)$'s sales increased in its latest quarter but inflationary pressures continued to build.
The company posted $62.68 billion in revenue for its quarter ended Aug. 29, up 17% from a year earlier. Analysts had predicted the chain would report $61.41 billion in revenue, according to FactSet.
Costco's comparable sales, or those from warehouse stores or websites operating for more than a year, rose 9.4% after stripping changes in gasoline prices and currency movements.A confluence of factors, including higher labor costs, freight costs and transportation costs, combined with a dearth of truckers and drivers, port delays, and container and component shortages were pushing the price of items higher, said Chief Financial Officer Richard Galanti on a call with analysts on Thursday.
It's a lot of fun right now.
-Richard Galanti
The wholesale retail chain estimated overall price inflation on its products were in the 3.5% to 4.5% range, up from its earlier estimate of 2.5% to 3.5% in the previous quarter.
Across the U.S. economy, inflation cooled slightly in August but remained elevated, as a surge in Covid infections continued to temper economic growth and exacerbated shortages of labor and supplies, driving up prices.
The company's selling, general and administrative expenses rose 12%.
Mr. Galanti said Costco is selling out of many of its general items within two weeks. To get ahead of long lead times and product shortages, he said the company is "ordering as much as we can and getting it in earlier."
Costco is also placing limits on certain key items like toilet paper, paper towels, water and highflying cleaning items due a rise in demand fueled by the Delta variant, Mr. Galanti said.
The Issaquah, Wash.-based company reported $1.67 billion in profit in its fiscal fourth quarter, up from $1.39 billion a year earlier. Earnings on a per-share basis were $3.76, up from $3.13, and topped analysts' expectations of $3.57 a share.
(END) Dow Jones Newswires
September 23, 2021 18:27 ET (22:27 GMT)
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