Will Price Aggression Help Costco Wholesale Corporation (NASDAQ:COST)?
Commodity prices are headed south and on Wednesday, Costco Wholesale Corporation (NASDAQ:COST) said that it will proportionately lower prices on supermarket-related goods. The company’s Executive Vice-President and CFO, Richard A. Galanti said that the company has always been at the fore in maintaining low prices irrespective of the fact that underlying costs have been on the rise. Even as those prices fall, it gives the company some margin-relief. He said that the company will continue being as aggressive as it has always been, on this front and that this is in their blood.
The aggressive stand
Galanti said that the company maintained low prices even when the prices of underlying raw-materials shot through the roof. Now that they are moving down a bit, it will give them a fairer margin in some segments where they had taken a very bad hit in the recent past. He added that they will continue doing what they are doing in the same aggressive manner. He said that though they do not undermine their rivals in any way the company feels that the biggest competition for them is the company itself.
In Wednesday’s trading, Costco Wholesale Corporation (NASDAQ:COST) rose by 2.12%. The opening price of the shares was $111.08, which climbed to an intraday high of $115.23 and dipped to a close of $114.59. Approximately 5.85 million shares were traded on Wednesday while an average volume of 1.60 million shares were traded over a 30 day period. The 52-week low of Costco Wholesale Corporation (NASDAQ:COST) shares is $93.51 and its 52-week high is $120.20. The company has a market capitalization of $50.04 billion
About the company
Costco Wholesale Corporation (NASDAQ:COST) along with its subsidiaries is involved operating membership-warehouses in the U.S, Canada, Puerto Rico, Mexico, the United Kingdom, Australia and Japan as well as via its majority-owned subsidiaries in Korea and Taiwan.