Spending uptick lifts Costco's income 46%
Advertiser News Services
PORTLAND, Ore. — Shoppers at Costco Wholesale Corp. are beginning to pick up a few modest extras such as doormats and coffee makers along with their must-haves like food, the company said yesterday.
The stronger sales to everyday shoppers and small businesses helped drive the nation's largest warehouse club's net income up 46 percent for the quarter.
"I think if there is a silver lining to this horrible economy over the last year and a half, it is that the warehouse clubs and us in particular, are the extreme value proposition," said Richard Galanti, Costco's chief financial officer. "People are shopping with us more frequently than they used to."
Costco reported that its profit climbed sharply in the fiscal third quarter on stronger sales and membership revenue, sending its shares up in trading.
The company, based in Issaquah, Wash., reported that it earned $306 million, or 68 cents per share. That's up from $210 million, or 48 cents per share, a year ago. Revenue grew more than 12 percent to $17.78 billion.
ELECTRIC TRAVEL MAY GET FEDERAL BOOST
WASHINGTON — The federal government would provide grants to help cities build the infrastructure needed to support electric vehicles and to offer new tax credits for buyers of those cars under legislation introduced yesterday in Congress.
The bills in the House and Senate are designed to smooth the way for the electric vehicles that are expected to start showing up at car dealerships in large numbers this fall. Supporters hope to add 700,000 vehicles to the road that are powered largely by electricity in the next several years.
The Senate bill would allow up to 15 municipalities and cities to apply to the Department of Energy for grants of up to $250 million to build infrastructure such as public recharging stations. The House version offers $800 million to five communities.
DRUG FIRM PROBED IN MEDICINE RECALL
WASHINGTON — The Food and Drug Administration, alarmed by quality-control problems with children's Tylenol and other Johnson & Johnson medications, prodded senior company officials last February to improve manufacturing and react faster to consumer complaints, a senior agency official told a congressional panel yesterday.
But promised improvements didn't come quickly enough and, under FDA pressure, the company on April 30 announced the largest recall of pediatric over-the-counter medicine in history.
Johnson & Johnson is under investigation by FDA's criminal division to determine whether any of its missteps warrant prosecution, Joshua Sharfstein, the FDA's principal deputy commissioner, told the House Oversight and Government Reform Committee.
Sharfstein characterized Johnson & Johnson's corporate culture as slow to respond and not always open about its actions.