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1. All three major U.S. stock indexes closed lower. The Dow Jones Industrial Average fell 0.54% to 49,395.16 points, the S&P 500 fell 0.28% to 6,861.89 points, and the Nasdaq Composite fell 0.31% to 22,682.73 points. Boeing fell more than 2%, leading the decline in the Dow. The Wind U.S. Tech Big Seven Index fell 0.29%, with Apple falling more than 1%. The Nasdaq China Golden Dragon Index fell 0.35%, with LuKong falling more than 3% and BaWangChaJi falling more than 2%. 2. Most of the three major European stock indexes closed lower. The German DAX fell 0.93% to 25,043.57 points, the French CAC40 was flat at 8,429.03 points, and the UK FTSE 100 fell 0.55% to 10,627.04 points. 3. A report released by the U.S. Treasury Department shows that in December of last year, 14 major countries and regions reduced their holdings of U.S. Treasury bonds, with a total reduction of $88.4 billion. The total holdings of U.S. Treasury bonds by overseas "creditors" fell to $9.27 trillion. The top three overseas "creditors" of the U.S.—Japan, the UK, and China—all chose to reduce their holdings of U.S. Treasury bonds. Among them, Japans holdings of U.S. Treasury bonds decreased by $17.2 billion to $1.1855 trillion, while the UK significantly reduced its holdings by $23 billion, with its holdings falling to $866 billion. 4. The U.S. crude oil futures contract closed up 2.49% at $66.67 per barrel; the Brent crude oil futures contract rose 2.25% to $71.93 per barrel. 5. International precious metals futures generally closed higher. COMEX gold futures rose 0.12% to $5015.50 per ounce, and COMEX silver futures rose 1.09% to $78.44 per ounce.The yield on Japans 5-year government bond fell 1.0 basis point to 1.620%.Japans preliminary services PMI for February was 53.8, down from 53.7 in the previous month.Japans preliminary manufacturing PMI for February was 52.8, down from 51.5 in the previous month.Japans preliminary composite PMI for February was 53.8, compared to 53.1 in the previous month.

Costco Margins Are Impacted by Growing Freight And Labor Expenses, And The Stock Price Falls

Charlie Brooks

May 27, 2022 09:50

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Costco Wholesale Corp (NASDAQ:COST) announced a decline in gross margins on Thursday, impacted by rising freight and labor expenses across the United States. The news sent shares of the membership-only retailer down 2% and overshadowed an otherwise positive quarterly report.


Fresh COVID-19 lockdowns in China and the Russia-Ukraine conflict have compounded the problem for U.S. businesses.


Costco announced that it would increase prices in certain food categories in order to battle inflation.


Retailers such as Walmart (NYSE:WMT) Inc and Target Corp (NYSE:TGT) have warned that decades-high inflation will have a negative impact on their earnings, as shoppers hesitate from purchasing non-essential and high-margin goods.


The average Costco buyer earns more than the average Walmart and Target shopper, allowing Costco to generate quarterly earnings and revenue that easily exceeds expectations.


Memberships and sales have been boosted by the company's efforts to keep gas prices several cents below the national average.


Costco, in contrast to Walmart, reported that there has not been a significant shift from branded products to its private label product, Kirkland Signature.


"We aren't really observing a decline in commerce. This year, more money is being spent on tickets, dining out, travel, tires, and gasoline "In a post-earnings conference call, Robert Nelson, senior vice president of finance and investor relations, said.


Costco's gross margins decreased by 99 basis points in the third quarter.


According to data from Refinitiv IBES, Costco's total sales for the quarter ending May 8 increased by 16 percent to $52.60 billion, surpassing analysts' projections of $51.71 billion.


Excluding adjustments, Costco's earnings per share were $3.17, exceeding analysts' expectations of $3.03.