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Costco Sales Rise 10%

3/02/2005 08:45:00 AM Eastern

Issaquah, Wash. — Costco Wholesale sales jumped 10 percent in the club’s fiscal second quarter, hitting $12.4 billion, up from $11.3 billion in the year-ago period.

Net income, which was positively impacted by a one-time $52.1 million income tax benefit, soared 35 percent. This reached $305.5 million, from $226.8 million in the same three months the previous year. Comp-store sales for U.S. locations rose 6 percent in the second quarter. Total company comps increased 7 percent in the same period.

Costco, which said it has adjusted its method of accounting for leases entered into over the past 20 years, recorded a cumulative pretax, non-cash charge of $16 million in the second fiscal quarter, which ended Feb. 13.

For the six months, Costco sales also increased 10 percent, coming in at $23.8 billion, up from $21.6 billion the previous period. Comp-store sales for U.S. stores jumped 6 percent, and total company sales 7 percent.

Net income moved up 29 percent in the first half, reaching $498.6 million, compared with $387 million in the same period a year earlier. Without the impact of the second-quarter tax benefit and the cumulative charge to pre-opening expenses, net income for the first six months would have been $456.5 million, an 18 percent increase year-on-year.

Costco also reported net sales of $3.8 billion for the four-week retail reporting month, ended Feb. 27, an increase of 9 percent over the $3.5 billion recorded the previous year. For the six-month retail reporting period, also ended Feb. 27 — which includes the first two weeks of the retailer’s fiscal third quarter — sales reached $25.6 billion, up 10 percent over the $23.4 billion reported a year earlier.

U.S. comp-store sales in the February reporting month rose 5 percent, and total company sales 7 percent. For the 26 weeks, U.S. comp-store sales increased 6 percent, and total company sales also rose 7 percent.

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