Some employees working at Costco Wholesale Corporation (NASDAQ:COST) are about to see their wages increase.
An increase to Costco pay was announced by CFO Richard Galanti during a conference call for its most recent earnings report on Thursday. According to Galanti, the retail company is planning to increase its minimum wages in the U.S. from $13 and $13.50 to $14 and $14.50.
Galanti says that the Costco pay increase for its minimum wage workers will go into effect on June 11, 2018. He also notes that the company will be increasing hourly wages for all other warehouse employees by between 25 cents and 50 cents at this time.
Galanti points out that this increase to wages will result in roughly 130,000 of its employees seeing their pay increase. The company is expecting this change to result in between $110 million to $120 million in pre-tax charges per year.
According to Galanti, the Costco pay increase is possible because of the recent change to tax laws in the U.S. These laws lowered the tax rates on companies, which frees up more cash for them to invest in their businesses. This includes increasing the pay of their employees or handing out bonuses.
You can check out the full transcript for Costco’s earnings call for its fiscal third quarter of the year over at Seeking Alpha. The call includes other details about earnings and more plans for the money it is saving due to the change in U.S. tax laws.
COST stock was down slightly as of noon Friday.
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As of this writing, William White did not hold a position in any of the aforementioned securities.
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