Membership-only retail chain Costco Wholesale Corp beat Wall Street estimates for quarterly results, even as it warned of delays in toys and seasonal items over the holiday season due to a global supply chain crunch.
Congested ports, a shortage of truck drivers and a scarcity of raw materials have made it harder for retailers to put products on their shelves in time for the all-important shopping season.
Retailers are rushing to meet pent-up demand over the holidays this year, trying everything from using air freight to ordering products well ahead of time, as an early start to the shopping season has sent some consumers making purchases in as early as September.
"Some inventory, in fact, won't make it before Christmas," chief financial officer Richard Galanti said, adding that Costco has mitigated that as best as possible, signalling some optimism on holiday supply.
With growing vaccination rates and easing COVID-19 curbs, more consumers stepped back into brick-and-mortar stores to buy supplies, boosting sales of everything from home furnishings to jewellery at Costco, which relies heavily on customers' treasure-hunt shopping experience at its cavernous warehouse clubs.
In November, Target Corp raised its sales forecast for the holiday season, boosted by early Christmas shopping, even as the retailer grappled with higher costs stemming from the supply chain crisis.
Total revenue in the first quarter ended 21 November rose 16.6% to $50.36 billion topping estimates of $49.60 billion, according to IBES data from Refinitiv.
Comparable sales, excluding the impact of fuel and currency fluctuations, jumped 9.8% in the quarter, also above expectations of an 8.74% surge.
Net income attributable to Issaquah, Washington-based Costco rose to $1.32 billion, or $2.98 per share, from $1.17 billion, or $2.62 per share, a year earlier. Analysts on average were expecting a profit of $2.64 per share.