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Costco Wholesale entered precious metals sales with gold bars last year, but its sales may have rebounded considerably since then, according to a Tuesday research report from Wells Fargo.
Wells Fargo equity analyst Edward Kelley said in a memo that then-CFO Richard Galanti said in mid-December that Costco had lost more than $100 million in cash during the financial crisis. He wrote that Costco’s gold and silver sales “seem to have increased significantly” since the company announced that it had sold 1,000 gold and silver products. [first] quarter. ”
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Costco reports $100 million in gold sales, This comes after Galanti previously said the 1-ounce bars uploaded to the retailer’s website go through incredibly quickly.
Costco is said to have made more than $100 million from gold sales since entering the precious metals market last year. (Costco/FOX News)
The company began offering gold bars in the fall. As FOX Business reported last month, most recently, the wholesale retailer went all-in on silver, selling tubes of 1-ounce Canadian Maple Leaf coins online.
In this photo illustration, 1 oz Canadian Maple Leaf silver bullion coins are lined up on March 14, 2021 in Katwijk, Netherlands. (Yuriko Nakao/Getty Images/Getty Images)
According to Wells Fargo’s Kelly’s research report, sales of these precious metals “currently may be hovering between $100 million and $200 million per month, which would account for nearly 1% of total comps.” “This will add slightly more to U.S. comps and about 3% to general merchandise.” sale. ”
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Selling gold and silver is likely to be “a very low-margin business at best,” the newspaper said, because of Costco’s pricing strategy for metals and shipping.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| Fee | Costco Wholesale Co., Ltd. | 718.59 | +6.78 | +0.95% |
Wells Fargo cited several factors as indicators of the potential for a “rapid uptick in momentum” since the introduction of gold bars and silver coins. According to the research note, these include “accelerated frequency of posts on Reddit, quick sell-out of products online, and strong monthly e-commerce sales for COST.”
A panoramic view of a Costco store in Teterboro, New Jersey, on June 28, 2023. (Kenna Betancourt/VIEWpress/Getty Images)
In early March, the company announced that second-quarter e-commerce sales “showed strong performance in several areas, led by gold sales and recently driven by silver sales.” Costco’s comparable e-commerce sales increased 18.4% year-over-year in the second quarter.
The company said its e-commerce business “offers a broad assortment of merchandise that complements our warehouses.” The store typically stocks about 4,000 items.
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The company’s total revenue for the second quarter was $58.44 billion. Meanwhile, net income was $1.74 billion.
The company has 875 warehouses worldwide.
