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Costco Sales Rise 10%, Net Climbs 6%

5/26/2005 09:00:00 AM Eastern

Issaquah, Wash. — Costco Wholesale enjoyed a 10 percent increase in sales during its fiscal third quarter, along with a 7 percent jump in comp-store sales.

Net sales climbed to $11.7 billion during the three months, ended May 8, compared with $10.7 billion in the year-ago period. Membership fees during the quarter reached $249.8 million, up from a year-earlier $224.5 million.

Net income at the wholesale club increased 6 percent in the third quarter, to $209.8 million, up from $198.7 million in the same three months in 2004.

For the nine months, net sales at Costco rose 10 percent, hitting $35.5 billion, up from a year-on-year $32.3 billion. Membership fees increased to $733.3 million during the period, compared with $654.9 million in the same nine months a year ago. Comp-store sales increased 7 percent.

Net income for the first nine months of fiscal 2005 soared 21 percent, rising to $708.4 million, from $585.6 million in the same nine months last year.

In the second quarter of the current fiscal year, Costco realized a one-time $52.1 million income tax benefit, and also recorded a one-time pretax charge of $16 million.

Net effect of these two items positively impacted the retailer’s second quarter and year-to-date earnings figures by $42.1 million. Without these two items, net income for the nine months would have been $666.3 million, reflecting a 14 percent increase over the same period the prior year.

Costco currently operates 452 warehouse locations, including 334 in the United States and Puerto Rico and 64 in Canada. The company plans to open eight to 10 additional new warehouses prior to the end of its current fiscal year, which culminates at the end of August.

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