Friday, September 25, 2020

Yahoo Finance Wall Street drills Costco stock because it's paying workers $2 more an hour during COVID-19

An example of the fact that what is good for Wall Street is at best not connected to what is good for the people.

Brian Sozzi·Editor-at-Large
Fri, September 25, 2020, 1:25 PM EDT

So much for doing the right thing.

Costco (COST) shares were drilled to the tune of 3% on Friday after delivering what looked to be an impressive fiscal fourth quarter. The company posted quarterly earnings some 33 cents ahead of analyst estimates, powered by an unworldly 11.4% same-store sales gain. Costco members flocked to warehouses to keep their cupboards stocked up as they continue to spend more time at home during the COVID-19 pandemic. Executives pointed out on an earnings call that it believes the pandemic has brought in new Costco members, too.

To round out the on-paper positives, Costco topped $4 billion in net earnings for the first time in its fiscal year and enters its new fiscal year armed with a $12.3 billion cash war chest.

Then why the selloff in Costco’s stock? Simply put, analysts appear not too pleased Costco continues to pay its workers what has become known in retail as pandemic pay. Costco began paying its workers an extra $2 an hour back in March at the height of the pandemic. While other retailers such as Kroger and Target have stopped pandemic pay, the notoriously pro worker Costco has kept its practice intact.


No comments:

Post a Comment