Issaquah, Wash. - Net income increased 10 percent, to $160.2 million at Costco Wholesale, in the retailer’s fiscal first quarter, ending Nov. 23, up from $145.7 million in the year-ago period.
First quarter results at wholesale club Costco benefited from an upbeat November, when the chain out performed rivals Sam’s Club and BJ’s, posting both higher sales and comp-store percentage increase.
As reported, Costco November sales climbed 17 percent to $3.8 billion, while comps increased 14 percent. Sam’s Club November sales reached $2.8 billion, up 7.4 percent, while BJ’s sales in November climbed 12.9 percent, to $564.7 million and comps rose 8.4 percent.
Costco’s first quarter sales increased 14 percent, reaching $10.3 billion, up from $9 billion in the same period in 2002. Comp-store sales jumped 11 percent.
Costco has enjoyed a spillover of customers gained from competitive supermarket chains in Southern California, which have lost regular shoppers to ongoing strikes and lockouts in the past 60 days, shifting more customers to Costco.
Also, earlier in the year, Costco had been facing sharp pricing pressure from Sam’s Club, resulting in Costco posting a 3 percent decline in net income for the fiscal fourth quarter. That decline was a response to lowered prices at Sam’s, the Wal-Mart wholesale club division.
Improving first quarter results at Costco also can be attributed to a healthier economy, since this club is shopped by numerous higher income consumers, attracted by the club’s upscale product selection, including fine jewelry and wine.
Although both Costco merchandise costs and expenses were higher in the first quarter, year over year, the retailer still increased operating income 7 percent, to $254.8 million, compared with $237.8 million in the same three months a year earlier.