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On a day when Federal Reserve Chairman Jerome Powell indicated that inflation could appear as the U.S. economy reopened, Costco said it also saw its own food inflation; a bacon.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| COST | COSTCO WHOLESALE CORP. | 319.04 | -4.88 | -1.51% |
“Bacon has risen by 45% in pounds, for whatever reason, there is a lot of demand, so there is a bit of a challenge,” CFO Richard Galanti said during an investor call.
Galanti, who is adept at explaining Costco’s hits and crimes, fueled the inflationary boom. “Some categories are in the 2-4% range, some like meat and pork a little higher than that, the products are flat,” he explained in response to a question. However, total inflation is low to 1-1.5%, he clarified.
It is unclear whether higher costs for meat and pork will be passed on to buyers.
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There are several factors that are driving pork prices higher, as reported by Farm Journal’s pork, including herd losses for American pigs linked to ‘swine reproductive and respiratory syndrome (PRRS) here – especially in Minnesota and Iowa’. In addition, there is the African swine fever that is harming China. varke.
In terms of broad US inflation, it remains below the Fed’s preferred level of 2%, but it shows signs of a rise in items such as energy. The oil price reached $ 63.83 a barrel on Thursday, the highest level since April 2019, followed by Dow Jones Market Data Group. Forecasters now predict that it could drop to prices at the pump in the coming weeks.
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In terms of second-quarter results, the warehouse trader posted earnings per share of $ 2.14, below the $ 2.45 analysts surveyed by Refinitiv. The company noticed higher costs due to the COVID-19 premium wages. Revenue was $ 44.77 billion, 14.5% higher than $ 39 billion in the same period a year ago. E-commerce sales rose 75.8% during the quarter.
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Last week, CEO Craig Jelinek announced during the testimony before Congress that his workers would receive an increase.
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“Since Costco was founded, the company has been committed to paying employees many competitive retail wages and offering them broad and affordable health care benefits,” Jelinek said. “Two years ago, we moved our hourly starting salary all over the US to $ 15. From next week, the starting salary will be $ 16,” he announced.
Shares of Costco have declined by 15% to date.