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Costco Posts Higher Sales, Income

Issaquah, Wash. — Costco reported higher net sales and net income for its fiscal third quarter, ended May 11.

Net sales for the third quarter of fiscal 2008 increased 13 percent to $16.26 billion, from $14.34 billion during the third quarter of fiscal 2007. Net income for the third quarter of fiscal 2008 was $295.1 million, compared with $224.0 million during the third quarter of fiscal 2007. In last year’s fiscal third quarter, Costco reminded that those results were negatively impacted by an increase in its sales returns reserve, in which consumer electronics was blamed.

In comp sales for the fiscal third quarter, U.S. sales were up 6 percent while international comp sales were up 16 percent.

The U.S. comparable sales figure includes, among other things, the effect of recent gasoline price inflation, with the average sales price per gallon of gasoline up 20 percent year-over-year for the quarter. Excluding this, U.S. comparable sales in the third quarter would have been 4 percent. In addition, significantly stronger foreign exchange rates, primarily in Canada, positively impacted the third quarter’s international comparable sales results. On a local currency basis, international comparable sales increased 6 percent in the third quarter.