Costco looks toward expansion as holidays near
ISSAQUAH, Wash. — A strong dollar and tumbling gas prices made Costco’s fourth quarter sales results seem weak. They weren’t and now the company plans to open 12 more clubs before year end.
Costco said total sales for its fourth quarter ended Aug. 30 increased 1% to $35 billion and same store sales declined 1%. Strip out the negative effects of a strengthening dollar and gas prices that were dramatically lower during Costco’s fourth quarter when compared to the prior year and total company and U.S. same store sales increased 6%.
Aided by membership growth, net income during the quarter increased 10% to $767 million from $697 million. Earnings per share increased 9.5% to $1.73 from $1.58 which was considerably better than analysts consensus estimate of $1.66. Membership income during the period increased 2.2% to $785 million.
For the full year, Costco’s sales increased 3% to $113.7 billion from $110.2 billion the prior year. Full year net income grew increased to $2.38 billion, or $5.37 per share, compared to $2.06 billion, or $4.65 per share, last year. Full year membership income increased 4.3% to $2.5 billion.
Costco ended the year with 686 warehouses worldwide, including 480 in the United States and Puerto Rico, 89 in Canada, 36 in Mexico, 27 in the United Kingdom, 23 in Japan, 12 in Korea, 11 in Taiwan, seven in Australia and one in Spain. The company said it plans to open 12 more locations before the end of the calendar year.
Target rolls out new price match policy
MINNEAPOLIS — The competition for retailers selling online just got a lot more intense with a new price-match policy from Target just ahead of the prime holiday shopping season.
Beginning Oct. 1, Target will price-match the websites of 29 major retailers in stores and for purchases from their website.
The new policy expands price-matching beyond the online outlets of local retailers with physical stores. This means that even if a customer lives in a city without a Buy Buy Baby store, for example, the customer can still get the Buy Buy Baby price at their local Target. This is also the first time Target will match online prices from warehouse clubs, such as Costco and Sam’s Club.
“It’s what companies have to do in this new world of retail,” Edward Jones retail analyst Brian Yarbrough told the Minneapolis Star-Tribune. “Pricing has become so transparent over the last few years.”
Target’s new policy is following the lead of Walmart, Best Buy and Staples, all of which match their online prices with online rivals. Target’s new policy also includes a longer time frame of 14 days to get a price adjustment, up from seven days.
Here’s the full list of Target’s new online price-matching retailers: Amazon, Babies ‘R’ Us, Bed Bath & Beyond, Best Buy, Barnes & Noble, Buy Buy Baby, Costco, CVS, Diapers.com, Dick’s Sporting Goods, Drugstore.com, GameStop, JCPenney, Kmart, Kohl’s, Macy’s, Newegg, Office Depot, Petco, Petsmart, Sam’s Club, Sears, Sports Authority, Staples, Toys ‘R’ Us, Ulta, Walgreens, Walmart, and Wayfair.
Amazon takes cue from Uber, will pay consumers to deliver packages
SEATTLE — Watch out Uber, Amazon may just steal away your drivers.
The online giant is launching an Uber-like program, called Amazon Flex, which uses on-demand independent contractors to deliver Amazon packages. The service is currently available only in Seattle (and only to members of Amazon’s same-day delivery service Prime Now), but the company expects to roll it out to other cities where Prime Now is offered, including Manhattan, Baltimore, Miami, Dallas, and Chicago.
“There is a tremendous population of people who want to work in an on-demand fashion,” Dave Clark, Amazon senior VP of world-wide operations, told the Wall Street Journal. “This is another opportunity for people to work with the company.”
To qualify to deliver packages for Amazon, drivers must provide their own car, own an Android smartphone, and pass a background check. Amazon bills Flex as a way for workers to “be your own boss” by setting the hours they want to work.
“You can work as much or as little as you want,” according to the Amazon site.