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UPDATE 2-Costco limits roll towel, bottled water purchases again as COVID-19 cases surge

(Recasts, adds details for from conference call)

By Deborah Mary Sophia and Dania Nadeem

Sept 23 (Reuters) - Membership-only retail chain Costco Wholesale Corp said on Thursday it was reinstating limits on purchases of key items including bath tissues, roll towels and bottled water, spurred by panic buying from customers amid rising COVID-19 cases.

A resurgence in COVID-19 cases had led to stocking up of household essentials last year during stringent pandemic-led lockdowns, forcing the company to put limits on purchases of key items.

While there was a shortage of cleaning supplies even last year, transportation issues this year are causing delays in deliveries to stores despite suppliers having plenty of stock, Costco Chief Financial Officer Richard Galanti said in an earnings call.

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The pandemic-driven port congestion and labor shortages have forced retail chains including Costco to spend more on transportation and labor, digging into their margins. Costco said it was paying six times for containers and shipping due to price increase on items shipped overseas.

Shares in Costco, which beat market expectations for quarterly revenue on strong demand for fresh foods, snacks, household items and jewelry, were up about 1% after the bell.

People returning to social events and outdoor activities following the rollout of vaccines has boosted demand for sporting goods and jewelry at Costco stores and helped offset some of the slowdown in sales of groceries following last year's lockdown-induced panic buying.

Comparable sales, excluding the impact of fuel and currency fluctuations, jumped 9.4% in the fourth quarter, compared with estimates of an 8.07% rise, according to Refinitiv IBES data.

Total revenue rose to $62.68 billion in the fourth quarter from $53.38 billion a year earlier. Analysts on average had expected revenue of $61.30 billion, according to IBES data from Refinitiv.

(Reporting by Deborah Sophia and Dania Nadeem in Bengaluru; Editing by Vinay Dwivedi)