Costco Beats Profit Forecasts

03-13-2013 - Costco Beats Estimates

Costco has proven itself to be one of the top retailers, easily beating estimates for the company’s profits. Membership fee revenue is increasing, and there seems to be no end to Costco’s reign over the rest of the warehouse stores. Of note, although Costco was able to benefit greatly from tax benefits, they seem to not be affected by any changes in the payroll tax.

Costco is one of the major forces behind the highest level of retail sales in the past five months. However, the market is not uniform, as other retailers, such as major competitor Walmart, struggle to increase revenue.

Costco is in a unique position, in that it is consistently raising profits and continuing to grow, while it also implements an unorthodox employment policy. Costco is one of the best places to work, providing great benefits and much higher than minimum wage. The idea is that retaining employees and reducing turnover reduces costs in new training and provides incentive for employees to work more efficiently. With Obama talking about raising the minimum wage, Costco is at the forefront of advocating for that proposal. I feel that it’s great that there is a real example of a business taking very good care of its employees while also prospering by a large margin over other competitors that treat employees like dispensable objects.

Source:

http://www.nytimes.com/2013/03/13/business/costco-profit-beats-expectations.html?_r=0

http://www.bloomberg.com/news/2013-03-13/retail-sales-in-u-s-rose-in-february-by-most-in-five-months.html

http://www.bloomberg.com/news/2013-03-12/costco-tk-earnings-release.html

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