Costco Wholesale’s strong earnings surpassed Wall Street’s expectations this week. Those results could’ve been even better, according to the big box retailer, if it weren’t for an outage that wreaked havoc on the company’s website on Thanksgiving Day.
Shoppers were greeted by error messages that warned of slow transaction and loading times rather than holiday deals. The outage lasted at least 16 hours, according to DownDetector.com, a service that tracks website outages. Costco’s app experienced similar issues, locking out users and preventing purchases from being completed during the time period. Costco (ticker: COST) extended its deals into Black Friday to make up for the downtime.
“It was unfortunate,” Richard Galanti, Costco’s executive vice president and chief financial officer, said during a conference call with shareholders Thursday. “Despite all the efforts to have plenty of processing capacity, if you will, there was something that incurred.”
Despite the difficulties on Thanksgiving, it’s been a positive year for the company. Costco stock has soared about 43% year to date, compared with the S&P 500, which has climbed about 26% year to date. The company is one of several low-cost retail chains to flourish while some department stores have fallen.
“What it tells us, we could have done better than that,” Galanti said when asked if this was a sign that the warehouse chain needs to improve its technology. “Rest assured, we’re spending a lot of money on things like that.”
Nevertheless, Costco reported e-commerce sales rose 5.7%, adjusted for gas prices and currency fluctuations, over the same quarter last year.
Costco stock closed down 1.84% to $291.87 on Friday.
Email: [email protected]