Costco's China store is booming, more planned
The U.S. and China may be locked in a fierce trade war, but that isn't hurting Costco's new store in China. Instead business is booming.
"Sales have remained strong over the past month," said Chief Financial Officer Richard Galanti during an investor call late Thursday.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| COST | COSTCO WHOLESALE CORP. | 971.88 | +10.33 | +1.07% |
"We have had record signups" he noted, adding that 200,000 shoppers are now members, which is well above the 68,000 average for a Costco warehouse.
Costco grabbed headlines in August when the store opened in a Shanghai suburb but was forced to close early as shoppers swarmed the retailer eager for deals and to see what U.S. retailer had to offer. The chaos was shared on social media at the time.
Galanti, who spoke of the frenzy, said "crowds are now well managed."
Due to the success and a long-term plan, Costco will open its second store in early 2021 in the Shanghai suburb of Pudong.
As for the ongoing trade war with China, Galanti noted the retailer is taking steps to "mitigate" the impact. He noted they are in constant discussions with suppliers and in some cases are accelerating shipments before select tariffs kick in.
The U.S. and China and trade officials are set to begin another round of trade talks this month.
Costco reported revenues of $47.5 billion in the fiscal quarter, slightly below analyst estimates. Profits were $2.69 per share, 14 cents ahead of estimates tracked by Refinitiv. Store sales rose 5.1 percent marginally below estimates.
Costco shares have gained 39 percent so far this year.