Costco Wholesale COST is taking multiple measures to brace for potential strikes at U.S. ports starting next week. The strikes could affect ports on the East Coast and the Gulf of Mexico.
What Happened: On Thursday, Costco CEO Ron Vachris detailed the company’s contingency plans during their fourth-quarter earnings call.
These plans include pre-shipping holiday goods and preparing to use alternative ports. Vachris emphasized the company’s proactive approach, stating, “We’ve done several different things that we could to get holiday goods in ahead of this time frame.”
The potential strike, set for Oct. 1, could close 36 ports that handle over half of the U.S. ocean trade, including essential items like bananas, meat, and prescription drugs. This could lead to delays and increased costs, impacting the U.S. economy and global shipping networks.
Vachris noted that while the situation could be disruptive, the full impact remains uncertain. “It could be disruptive based on how impactful, I can’t tell you until we know the length and what could happen out there. But it is in our sights,” he said.
See Also: Inflation Data ‘Will Be Watched Like A Hawk’ Friday After Fed’s Interest Rate Cuts
Why It Matters: The looming strike comes at a critical time for retailers, especially as they prepare for the holiday season. The potential disruption could have far-reaching effects on the supply chain and consumer prices.
Earlier this month, retailers urged the White House to intervene in negotiations between the International Longshoremen’s Association and the U.S. Maritime Alliance. The ILA represents over 85,000 dockworkers, and their contract is set to expire on Sep. 30.
In August, transatlantic shipping volumes surged as retailers preemptively increased their inventories. This was a move to counteract potential supply chain disruptions.
On Sep. 17, container trade expert Christian Roeloffs warned that a strike could severely disrupt nearly half of the nation’s ocean trade. He noted that negotiations were showing signs of breaking down, making a strike increasingly likely.
Costco’s recent fourth-quarter earnings report revealed a revenue miss but an earnings per share beat. The company reported quarterly earnings of $5.29 per share, surpassing analyst estimates of $5.08 per share. However, the revenue of $79.697 billion fell short of the consensus estimate of $79.973 billion.
Price Action: Costco Wholesale Corporation’s stock closed at $901.44 on Thursday, down 0.77% for the day. In after-hours trading, the stock fell further 1.43%. However, year to date, Costco’s stock has increased by 38.54%, according to data from Benzinga Pro.
Read Next:
Image Via Flickr
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=66f633d4ce0b46069d9c59f85262d700&url=https%3A%2F%2Fwww.benzinga.com%2Fmarkets%2Fequities%2F24%2F09%2F41059881%2Fcostco-gears-up-for-potential-us-port-strikes-as-ceo-stresses-proactive-steps-america-could-get-&c=17651392554998822192&mkt=en-us
Author :
Publish date : 2024-09-26 16:46:00
Copyright for syndicated content belongs to the linked Source.
