Big box retailer Costco (NASDAQ:COST) reported earnings for the fiscal third quarter, which ended May 10, 2020, that included both tailwinds and headwinds from the ongoing COVID-19 pandemic. Net sales increased 7.3% versus last year, as early pandemic panic buying transitioned to lower sales as the outbreak spread and stay-at-home restrictions increased.
Total revenue of $37.27 billion beat analyst expectations of $37.13 billion, according to CNBC. The drop in April comparable sales marked the first monthly decline since July 2009. The company was not alone, however. Government data showed that consumer spending decreased 13.6% in April.
After a run on supplies boosted sales in the early days of the pandemic, Costco said the quarter was negatively impacted "from incremental wage and sanitation costs" associated with COVID-19. Other impacts included limiting the number of shoppers in some stores, and closing or limiting service in certain areas such as optical hearing aids, photo centers, and food courts. Shoppers also focused more on food purchases, lowering discretionary item sales in areas like jewelry and luggage, according to the CNBC report.
Same-store sales for the quarter increased 4.8%, and e-commerce sales jumped 64.5%. Net income was $838 million, a drop of 7.5% versus the year ago period, due to the additional COVID-19 related expenses.
On the company's earnings call, chief financial officer Richard Galanti said the average transaction price increased 9.3% for the quarter. Looking ahead, he said, "recently, our sales have started to recover somewhat as states have begun to relax restrictions."