Costco reports Q2 results, raises minimum wage
Costco reported a sharp increase in same-store sales for the holiday quarter. It also has hiked its starting pay for the second time in 12 months amid a still-tight labor market.
Costco has raised the minimum starting wage for store workers in the U.S. and Canada from $14.50 to $15.50 an hour, effective as of March 4. It was only last June that the retailer raised its minimum wage from $13 to $14 an hour. The bump comes as Amazon has also raised its starting wage to $15 an hour.
“In addition, we’re also increasing wages for supervisors and introduced paid bonding leave for all hourly employees,” CFO Richard Galanti told investors on the company’s quarterly earnings call.
Costco’s earnings rose to $889 million, or $2.01 a share, for the quarter ended Feb. 17, from $701 million, or $1.59 a share, a year earlier. Analysts had expected EPS of $1.69.
Revenue totaled $35.39 billion, up from $32.27 billion last year. Total same-store sales rose to 6.7%. Analysts had expected revenue of $35.65 billion.
Costco has been investing in its online operations, including expanding its delivery operations for online grocery orders. Its investments are paying off: The company’s online comp sales surged 25.2% in the quarter.
Costco currently operates 770 warehouses, including 535 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the United Kingdom, 26 in Japan, 15 in Korea, 13 in Taiwan, 10 in Australia, two in Spain, and one each in Iceland and France. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, and Taiwan.
It's great to see pay scale increased made voluntarily by companies in the private sector as opposed to government mandate. This is how a vibrant economy and private enterprise is supposed to work, and it works best this way. It creates pressures within the industry itself for others to raise wages because of competition for the best labor. Everybody wins.