(Reuters) – Costco Wholesale Corp (O:) recorded high coronavirus-related costs for the second straight quarter, overshadowing its better-than-expected results and sending the company’s shares down 3% in extended trading on Thursday.
The warehouse chain spent about $ 281 million on employee bonuses and sanitizing its warehouses in the fourth quarter, mirroring a trend of rising costs across U.S. retailers during the health crisis.
Costco had estimated in May that COVID-19-realted costs would exceed $ 100 million, but would be lower than the $ 283 million incurred in the prior quarter.
“$ 281 million is over $ 100 million but quite a bit larger,” Chief Financial Officer Richard Galanti said on an earnings call.
The company cited the $ 2-an-hour premium paid to employees as a factor for the jump in costs. The bonus costs Costco $ 14 million a week.
“We’ve committed to doing that at least through, I believe, the first eight weeks of this fiscal quarter,” Galanti said.
Several U.S. retailers, including Kroger Co (N:) and Amazon.com Inc (O:), have come under fire for stopping hazard pay for their workers.
Higher demand for fresh produce, appliances and gardening and sporting goods helped Costco’s total revenue climb 12.4% to $ 53.38 billion in the quarter ended Aug. 30, beating the average estimate of $ 52.08 billion, according to Refinitiv data.
Traffic at the warehouse chain, where customers typically buy items in bulk at lower prices, also ticked up in the quarter, after declining about 20% in April, as COVID-19 restrictions eased and it brought back food samples.
Revenue from memberships rose 5.3% to $ 1.11 billion, while online sales nearly doubled.
Excluding items, Costco earned $ 3.04 per share, beating estimates of $ 2.84.
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