That’s why it was surprising when investors learned on Thursday that Costco hadn’t raised its entry-level wage since Congress last voted to raise the federal minimum wage, nine years ago – meaning that it had actually declined when factoring in inflation.
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Entry-level wages will increase to $13 an hour, that’s $1.50 more than the current minimum wage.
Costco’s highest paid workers make around $22.50 an hour. The announcement for the retailer, which had more than 200,000 employees at the end of the summer, follows Wal-Mart’s decision to give all hourly workers, at least, a 2 percent raise in February, The Wall Street Journal reports.
Richard Galanti, Costco’s chief financial officer, says that since… And frankly in some markets, this is a physical challenging, a physically challenging job.
“You’re on your feet, you’re lifting cases, you’re pushing carts at these entry-level jobs”, he said.
The increase will cut its earnings per share in the next three months by 1 cent, and by 2 cents in the following three quarters, Bloomberg reported.
Employees at the top of the pay scale will receive a 2.5% raise this year. Merchandise and service sales increased 2.6% to $27.9 billion and membership fees increased 3.6% to $603 million.
Employees at the top of the pay scale will receive a two-and-a-half percent raise this year.
The largest restaurant operator in the United States said identical supermarket sales, excluding fuel, rose 3.7 percent in the quarter – less than the 4.5 percent rise analysts expected, according to research firm Consensus Metrix. Analysts expected earnings of $1.28 per share, according to FactSet.
Overall for the quarter, Costco reported a profit of $546 million, or $1.24 a share, down from $598 million, or $1.35 a share, a year earlier. It offers a differentiated product range which enables the company to provide an upscale shopping experience for its customers, hence resulting in higher market share.
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Revenue for the second quarter also fell short of analysts’ estimates of $28.42 billion. “And so we thought it was time to do it”. Same-store sales in Canada fell 7% in the quarter, but would have increased 10% excluding the impact of a strong dollar and lower gas prices.
