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Costco CFO Richard Galanti said Thursday the company was “happy” regarding theft.
Galanti said at one point on Thursday afternoon’s earnings call that Costco’s shrink is “intact,” saying the company “has not seen any major changes in shrink.”
He noted that it was a question the company had received a few times late due to some of the companies reporting much higher shrink.
In retail, the word “shrink” refers to theft and other loss of inventory.
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A Costco store on September 23, 2022 in Monterey Park, California. (Eric Thayer/Getty Images/Getty Images)
“It actually fluctuated a few three basis points pre-COVID when we rolled out the self-checkout and since then it’s come back down a bit, and it’s in a very tight range,” Galanti added. “We’ve been lucky in that regard.”
Costco, known for the sheer size of its product offerings, has previously said it believes the theft was “well below that of typical retail activity” due to the company’s “strictly controlling” entry points and membership usage.
A Costco Wholesale shopping club in Austin, Texas, December 12, 2016. (REUTERS/Mohammad Khursheed/Reuters Photos)
Customers shop for clothing at a Costco on July 13, 2021 in Novato, California. (Justin Sullivan/Getty Images/Getty Images)
Some retailers are reporting higher levels of theft.
Dollar Tree Inc. said earlier Thursday when it reported its own earnings that it was “not immune to the external pressures hitting the entire retail industry, particularly the margin impact of increased shrink and the product mix shift to consumables.”
As these two factors are expected to continue through the remainder of the year, it said it had adjusted its 2023 fiscal projection for its diluted earnings per share, saying it would end in the $5.73 to $6.00 range. 13.
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Executives at Kohls, Foot Locker, Walmart and Target have also raised theft issues in recent weeks, as previously reported by FOX Business.
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The National Retail Federation said in one of its reports that total losses from shrink were $94.5 billion in 2021, compared to $90.8 billion in 2020.
Galanti’s comments came as Costco’s third-quarter financial results were released.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| COST | COSTCO WHOLESALE CORP. | 486.55 | +3.79 | +0.79% |
The company saw its quarterly revenue increase by 2% compared to the same period in 2022 to reach $53.6 billion. Of that total, $52.6 billion came from net sales, while $1 billion was generated from membership fees.
Net profit for the third quarter, $1.3 billion, was slightly down. In the same three-month period last year, it reported $1.35 billion.
Danielle Genovese contributed to this report.