Costco's earnings improve by 12 percent
By Allison Linn
Associated Press
SEATTLE — Costco Wholesale Corp. said yesterday that its fiscal first-quarter profit grew 12 percent, helped by growth at its warehouse clubs open at least one year.
For the 12 weeks ended Nov. 20, the nation's largest wholesale-club operator reported quarterly earnings of $215.8 million, or 45 cents per share — up from $193.2 million, or 40 cents per share, a year earlier.
The latest quarter included a charge of about 1 cent per share from damage because of Hurricane Wilma in Florida, while the prior year's results included a 1-cent-per-share charge from four hurricanes in the state.
The Issaquah-based company said net sales for the quarter increased 12 percent to $12.66 billion from $11.34 billion last year, with sales up 9 percent at warehouses open at least one year.
Total revenue, which includes membership fees, increased to $12.93 billion from $11.58 billion in the year-ago period.
In a conference call with analysts, Costco Chief Financial Officer Richard Galanti said the retailer was particularly pleased with consumer electronics sales.
"The business is on fire," he said, adding that sales via its Web site are also "going great guns."
Costco's profit met analysts' estimate of 45 cents per share, and was above expectations for $12.82 billion in revenue, according to a Thomson Financial poll. The company had not provided specific guidance, but said in October that analysts' estimates were at the high end of what it expected to earn.
Galanti would not specify whether the company might increase its $45 annual membership fee in response to competitors' moves. Sam's Club, a unit of Wal-Mart Stores Inc., will raise its fees by $5 to $40 for consumers and $35 for businesses, effective Jan. 1. BJ's Wholesale Club Inc. also plans to raise its membership fee to $45 early next year.
"At some point I think we will change it. ... We haven't made any decisions yet," Galanti said.
Costco shares fell $1.06, or 2.2 percent, to close at $48.29 yesterday on the Nasdaq Stock Market. In the last 52 weeks, shares have traded between $39.48 and $51.21.
