revenue and earnings-per-share for the first quarter of fiscal 2023 came in below estimates Thursday, with CFO Richard Galanti giving an update on inflationary pressures.
"In the first quarter, we estimate the equivalent year-over-year [price] inflation number in the range of 6% to 7%. Food and sundries is still up more than non-foods. But, overall, a little better level than a quarter ago for the company," he said. "And commodity costs are mostly coming down, whether it’s corn, flour, sugar and butter or even some things like steel. A few things are up, but, overall, we’re seeing a little bit of a trend, but we’ll keep you posted.
A shopper wearing a mask looks at clothing for sale inside a Costco store in San Francisco March 3, 2021.While discussing November sales, Galanti said "big ticket discretionary has a little bit of weakness." He noted during the call that profits from gas sales have helped Costco "continue to hold prices where we can on some things." Later, he pointed to fresh foods as an example of where the company has "held the price points" on items, including some proteins and baked goods, despite inflation. He said the company "saw strength in" last quarter. However, Costco doesn’t "see currently a lot of trade down on fresh," he added.
While on the call, he also answered analyst questions about whether Costco will raise the price of its membership fees, at one point saying he’d "be coy on when that might be."
Source: News Formal (newsformal.com)
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