Costco Sales Rise 10%, Net Increases 6%

By Jeff Malester On Jun 6 2005 - 6:00am

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.