It is easy to see a bright future for Costco. Sales in the third quarter 2021, were well ahead of expectations. Net sales increased +21.7% to $44.4 Billion from $36.5 Billion last year. Net income for the quarter was $1.2 Billion or $2.75 per fully diluted share compared to last year’s $838 Million or $1.89 per fully diluted share.
During the quarter, the company opened 6 warehouses and now operates 809 warehouses. 559 of them are in the United States. The company plans to reopen restaurants, albeit with more limited seating facilities, in the fourth quarter. At the same time, sample offerings will return, but their distribution will be more controlled and individual portions will be offered.
Despite the strong results and recent new openings, Costco cannot rest on its laurels. It has important issues to address and also some opportunities to develop. Like all businesses these days, the company is facing the inflationary pressure building across the economy. It has moved up the estimate of current inflation to about 2.5% with some more to come. Of note, that inflation was felt throughout the logistics area. Mr.
At the same time, there is an opportunity because Costco is seeing a new customer. These shoppers have been younger and more interested in technology. Mr. Galanti pointed out that more women are joining as well. Those new customer segments present a source of growth for the future. Costco recently also started to test curbside pickup at three locations in Albuquerque, New Mexico according to grocery business.com. The tests are on-going, and customer response has been above expectations. That’s not a surprise, since most general merchandise chain-stores have trained customers to pick-up their orders curbside. It is a good move as such service conveniences are just what those new customers want.
Source: News Formal (newsformal.com)