©Reuters.Costco has minimal inflation overall, but inflation is visible on some products.
Warehouse club operator Costco (NASDAQ:) is seeing little inflation overall, with some large ticket He said deflation was seen in products.
“In our most recent fourth quarter discussions, we were estimating year-over-year inflation to be in the range of 1-2%. Our estimate for the just-ended quarter was that inflation would be 0-1%. It was in the % range.” Costo CFO Richard Galanti said Thursday night on the company’s first quarter conference call.
He added that some large ticket products are actually experiencing deflation, and the main reason for this is lower fares.
He said, “Deflation is increasing for some large and bulky items, such as furniture sets, due to a year-on-year decline in freight rates, and deflation is also occurring again for items with high freight rates, such as large, low-priced items destined for domestic shipments. “I have,” he added. “The deflation rate for some products was as much as 20% to 30%, and most of them were freight-related.While the average selling price of items such as televisions has fallen, unit prices have risen. So our inventory and SKU counts are in good shape across all channels. And so far, our seasonal sell-through during the quarter has been good.”