Costco logged strong sales growth during its latest quarter, as shoppers raced to stock up on cleaning products, household essentials and food as the coronavirus outbreak spread.
The company said Thursday that sales at its stores open for at least one year, a key metric, increased 9.1% during its previous quarter compared with the same period last year.
Sales at Costco in February were up 12.4% from a year ago. The company attributed around 3% of that to “an uptick in consumer demand” from concerns over coronavirus.
Shoppers have posted pictures on social media in recent days of lines snaking around Costco stores. They have also posted pictures of shelves empty of sanitizers at Costco, Walmart, CVS, Walgreens and other drug stores.
“Members are turning to us for a variety of items associated with preparing for and dealing with a virus,” Costco CFO Richard Galanti told analysts on a call. These items include dry grocery items, cleaning supplies, Clorox and bleach, water, paper goods, hand sanitizers, sanitizing wipes, disinfectants, health and beauty aids.
“It’s been a little crazy this past week in terms of outside shopping frequency and sales levels,” he added.
Shares of Costco, Walmart, other big-box chains and grocers have rallied this week as investors flock to stocks that are seen as benefiting from coronavirus fears.
“As consumers prioritize a dwindling number of trips to stores, [Costco] will likely be at the top of the list,” UBS analyst Michael Lasser said in a note to clients Wednesday. “Over the long-term, we think the stock-ups will help accelerate [Costco’s] share gains.”
Cleaning product manufacturers like Clorox and consumer goods’ companies such as Campbell Soup have also reported an increase in demand for their products in recent weeks.
Kroger on Thursday noted that consumers have been stocking up on water, hand sanitizer, soap, pre-made meals and soups as the virus has spread.
“There’s certainly been heightened activity” from shoppers, Kroger CFO Gary Millerchip said on a call with analysts.