Costco Sales Rise 11%
By Jeff Malester -- TWICE, 3/13/2006
Issaquah, Wash. — Flourishing after a strong finish to the holiday selling period, Costco Wholesale reported an 11 percent increase in fiscal second quarter sales, coming in at $13.8 billion, compared with a year-ago $12.4 billion.
Comp-store sales climbed 7 percent.
However, net income in the second quarter, ended Feb. 12, decreased to $296.2 million, down from $305.5 million the previous year. This was due to income for the three months a year ago being positively impacted by a one-time $52.1 million income tax benefit.
Additionally, during the year-ago second quarter, Costco adjusted its method of accounting for leases, and recorded a cumulative pretax, non-cash charge of $16 million. Excluding these one-time items, net income for the second quarter of the previous fiscal year would have been $263.4 million.
In the second quarter, Costco registered $269.8 million in membership fees, compared with a year-on-year $245.5 million. When adding fees and sales, total second-quarter revenue reached $14.1 billion, up from $12.7 billion the prior year.
For the six months, Costco sales also increased 11 percent, rising to $26.4 billion from a year-earlier $23.8 billion. Comp-store sales moved up by 8 percent.
Net income for the first half increased 3 percent to $512 million, compared with $498.6 million. Without the impact of the prior year's second-quarter tax benefit and the cumulative charge to pre-opening expenses, net income for the year-ago six months would have been $456.5 million.
Membership fees for the six months came in at $532.3 million, up from $483.6 million in the first half of the previous year. Total revenue for the six months, including fees, moved up to $27 billion, from $24.2 billion.
Costco, which currently operates 471 warehouses, including 346 in the United States and Puerto Rico, plans to open an additional 18 to 20 new warehouses prior to the end of its fiscal year, Sept. 3. The company also will relocate two or three warehouses to larger and better-located facilities.
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