Costco Wholesale Corp beat market estimates for first-quarter profit and revenue as pandemic-wary consumers staying at home bought more groceries, liquor and electronics.
Aiming to limit contact with fellow shoppers and retail workers, many consumers opted to shop from big-box chains that sell everything from hand soap to electronics under one roof, boosting store traffic for Costco during the quarter.
Overall online sales jumped about 86% while revenue from memberships, which accounts for most of Costco's gross margin, rose 7%.
Chief financial officer Richard Galanti said people have redirected some spending previously earmarked for travel, hotel and dining out to purchases including electronics, furniture and mattresses.
Costco also saw stronger demand for some essential items as COVID-19 cases rose, similar to trends highlighted by Kroger Co in its third-quarter results announcement.
Net income attributable to Costco soared 38% to $1.17 billion. Excluding items, it earned $2.30 per share, beating the Refinitiv IBES estimate of $2.05.
However, the company incurred a pre-tax expense of $212 million from COVID-19-related charges, and said it had extended higher wages for its workers through Jan. 3.