Costco Reports 16.3% Net Sales Growth In Fiscal Q3 2022, Reiterates Hotdog Price Remains At US$1.50
Costco Wholesale (Nasdaq: COST) announced on Thursday its financials for fiscal Q3 2022 ended May 8, 2022. The firm recorded US$51.61 billion in net sales, a jump from Q3 2021’s US$44.38 billion.
Adding the revenue contributed by membership fees amounting to US$984 million, the total topline figure came in at US$52.60 billion, beating the street estimate of US$51.5 billion.
The biggest share in comparable sales growth came from the US market at 16.6%, an increase from last year’s 10.7% while the non-North American market declined to 5.7% from last year’s 9.1%. Total comparable sales grew 14.9% during the quarter compared to last year’s 10.8%.
Further down, the firm recorded a net income of US$1.35 billion, also up from last year’s US$1.22 billion. This translates to US$3.04 earnings per diluted share, also beating the estimate of US$3.02 per share.
The performance for the quarter comes amid the highest rates of inflation. But Senior Vice President for Finance & Investor Relations Bob Nelson, speaking at the earnings call, said the company plans to mitigate potential price increases.
“I think we always want to be the best value in the marketplace. And to the extent that we continue to show that, I think it’s easier for us to pass on higher pricing, or higher freight costs, or raw material cost, assuming that we show that value in the marketplace,” said Nelson.
Stepping in for CFO Richard Galanti, Nelson also reiterated in the call that the price of its hotdog meal will stay at US$1.50. This is to address the viral tweet last week that falsely claimed the price will hike up by US$1.00 due to inflation, causing the firm’s shares to fall by 13%.
“I want to address some incorrect information floating around on social media and a few other media outlets claiming that we have increased the price of our $1.50 hot dog and soda combinations sold in our food courts. Let me just say the price when we introduced the hot dog/ soda combo in the mid-80s was $1.50. The price today is $1.50, and we have no plans to increase the price at this time,” added Nelson.
The wholesale giant ended the quarter with US$11.19 billion in cash and cash equivalents, putting the balance of current assets at US$33.00 billion. Meanwhile, current liabilities ended at US$31.85 billion.
Costco last traded at US$464.99 on the Nasdaq.
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