People load Clorox into their car in the Costco parking lot after the first confirmed case of coronavirus was announced in New York State, in Brooklyn, New York, March 2, 2020.
Andrew Kelly | Reuters
Costco reported stronger sales than analysts were expecting Thursday, thanks in part to a boost the company received from consumers stocking up at its stores to prepare for a more widespread outbreak of the new coronavirus.
“February sales benefited from an uptick in consumer demand in the fourth week of the reporting period,” the company said. “We attribute this to concerns over the coronavirus.”
Costco said the impact boosted its monthly same-store sales for February by roughly 3%. For the month ended March 1, same-store sales were up 12.1%. Gordon Haskett analyst Chuck Grom had been calling for monthly same-store sales growth of 7.5%.
Throngs of shoppers this past weekend and into this week have flocked to Costco stores across the country to stock up on water, paper towels, sanitizing wipes and other household goods. The company told analysts Thursday it has been receiving deliveries daily. It also said, in some instances, it is placing limits on how much people can purchase. It said it is working speedily to limit out-of-stocks in grocery and household necessities.
“Overall … it just takes a little more work,” CFO Richard Galanti said during a post-earnings conference call with analysts.
“These last nine or so days has been beyond busy,” he added.
For its fiscal second quarter, overall, Costco said same-store sales, which is a metric that tracks sales online and from stores for at least 12 months, rose 8.9%. They were up 7.9% when excluding the impact of gasoline prices and currency fluctuations, the company said.
Galanti told analysts Thursday that sales have still been trending higher into the first few days of March. But he said it is still too difficult to quantify the impact COVID-19 will have on its future results.
When shoppers are coming in to prep for the coronavirus outbreak, Galanti said customers are also buying other big-ticket items, such as patio furniture, which could end up being a bigger boon to sales.
Regarding its supply chain, Costco said in China “closures of many manufacturing facilities extended well beyond the typical one-week Chinese New Year holiday.”
“In many cases, factories over there were closed for one to two additional weeks,” Galanti said. “That’s now improving each week.”
Costco is expected to report its March sales results, for the five weeks ending April 5, on April 8.
Costco shares were down less than 1% in after-hours trading Thursday. The stock had closed Thursday down about 1.5%, amid a broader sell-off. Costco has a market cap of about $139.5 billion.
Read the full earnings release here.
Correction: This story was updated to correct the spelling of Costco.