Costco Wholesale Corp. reported a 22% increase in ecommerce sales for its fiscal third quarter, ended May 12. Adjusted for currency fluctuations, sales through its website were up 19.5%, but exact figures were not disclosed. Ecommerce is up 24.7% during the previous three quarters at the warehouse retailer, which is No. 15 in the Internet Retailer 2019 Top 1000.
Costco has expanded its online selection in recent quarters, drawing more shoppers to its website, Richard Galanti, chief financial officer, said in a conference call with analysts. That includes products that are only available seasonally in its warehouses, which has helped it drive shoppers online instead of to a competitor.
Costco also added smaller items, including beauty and food products, that are shipped via its new automated facilities that opened this year, Galanti said in a call transcribed by Seeking Alpha. He said that these tactics have helped Costco’s online business be slightly more profitable than its warehouses, but notes that returns are often made in stores, which reduces margins there.
More Costco members are also using its website to shop, Galanti noted, without giving an exact figure. However, he said the number of shoppers is growing at a faster pace than in previous years.
These advancements come ahead of ecommerce launching in Japan and Australia this year. The new markets will join ecommerce operation in the U.S., U.K., Canada, Mexico, Korea and Taiwan.
In other earnings news:
- Gap Inc. (No. 28) reported that Old Navy’s online sales remained strong despite an overall revenue decline in the first quarter for the brand ahead of a 2020 spinoff. Overall, Old Navy sales were down 1% for the quarter ending May 4, but online sales grew “in the high teens,” according to CEO Art Peck. Sales across all Gap brands were down 2% to $3.7 billion year over year. Exact ecommerce sales were not disclosed.
- Ulta Beauty (No. 87) grew ecommerce sales for the first quarter ending May 4 by 20% to 30%, according to chief financial officer Scott Settersten. He did not disclose exact figures. The increase was driven by an increase in traffic, Settersten said.