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Costco Margins Take Hit Amid Rising Labour And Freight Costs

On Thursday, Costco Wholesale Corp reported a decline in gross margins, hit by spiralling labour and freight costs across the US.

Posted: 27th May 2022 by
Finance Monthly
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The drop has sent the retailer’s shares down 2%. 

Across the board, companies in the United States have been struggling with higher costs due to supply chain disruptions, worsened by the ongoing conflict in Ukraine and renewed Covid-19 lockdowns in China.

Costco plans to up prices in certain areas to combat record-high inflation. But, despite this challenge, the retailer still succeeded in posting quarterly profit and revenue that topped estimates. In the quarter which ended May 8, Costco’s total revenue increased 16% to $52.60 billion, compared with estimates of $51.71 billion. 

Additionally, Costco’s efforts to keep gas prices several cents lower than the national average have boosted sales and memberships. 

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