Costco shopper's $400G diamond ring purchase gave chain 'significant' sales boost
Costco had to do a price check after noting a nearly $400,000 purchase at one of its stores during its most recent quarter.
The whopping price tag was attached to one item: a diamond ring.
The sale was significant for the chain, which is known for its discount prices. Currently, Costco lists nearly 470 diamond rings on its website. The highest priced is a round platinum solitaire ring listed for $419,999. The second highest diamond ring is $280,000 cheaper.
It's sale clearly put a sparkle in Costco CFO Richard Galanti's eye.
During an earnings call with investors Thursday, Galanti said the purchase helped boost sales for the quarter.
"Sales highlights for the quarter included some significant diamond repurchases one in the $400,000 range and big-ticket items like golf simulators that sold for $14,000 each which we sold during the fine pay period," Galanti explained on the call.
Michael Lasser, an equity research analyst for investment banking company UBS, prodded Galanti about the big buy during a Q&A session.
"Richard, how are you going to comp the $400,000 diamond ring? It's going to be tough next year," Lasser commented.
Costco lists nearly 470 diamond rings on its website. (Costco)
"Well, do you have an anniversary coming up?" Galanti joked.
Lasser then quipped he "couldn't afford it" even if he did.
But on a serious note, Lasser then questioned whether there's something specific causing the retailer's traffic to "moderate," a trend he's been seeing in recent weeks.
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"Well, look every time it reminds me of a few years ago when we saw a slight moderation in traffic and it was, 'Oh my God, this is the new normal.' And our answer then was we don't know," Galanti replied. "What we know is we've got a lot of exciting things going on in buying. We certainly — the different buckets of money we talked about over the last few years whether it's the fee income for membership fee increases, the credit cards switch, the tax reform, all those things don't go away. They, in fact, grow each year a little bit. And so I think that we feel that we're in a good position to keep driving it."
On Thursday, Costco reported a fiscal third-quarter profit of $906 million.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| COST | COSTCO WHOLESALE CORP. | 721.86 | -0.87 | -0.12% |
The Issaquah, Washington-based company said it had a profit of $2.05 per share. Earnings, adjusted for non-recurring gains, came to $1.89 per share.
Costco shares have risen 19 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed 11 percent. In the final minutes of trading on Thursday, shares hit $241.47, a climb of 21 percent in the last 12 months.
Glassdoor named Costco one of the best places to work in 2019 after a year hiatus off the list. The company pays employees some of the highest wages among U.S. retailers with an average hourly salary of $22.50.
The Associated Press contributed to this report.