Costco sees double-digit increases in net sales for Q3

-- Home Textiles Today, 5/27/2010 9:03:00 AM

Issaquah, Wash. -- Costco Wholesale Corporation experienced strong sales gains in its third-quarter and year-to-date results, with double-digit increases in both.

The 12-week third quarter ended with a 12% increase in net sales to $17.39 billion, from $15.48 billion during the third quarter of fiscal 2009.

Comparable-store sales were also up double digits – or 10% -- for the total company. The U.S. division saw a more modest increase of 6% but the international segment saw comps jump by 26%. Excluding the positive impacts from gasoline inflation and the strengthening of foreign currencies, primarily in Canada, the United Kingdom and Korea, comps were up 4% for the total company, 3% in the United States and 8% in international.

Also strong was third quarter net income, which was $306 million, or $.68 per diluted share, compared to $210 million, or $.48 per diluted share, during the third quarter of fiscal 2009.

Costco noted that its third-quarter results “were positively affected by a partial reversal in the amount of $14 million (pre-tax) of a charge related to a Canadian tax liability, previously taken in the second quarter of fiscal 2007. Third quarter results last year were negatively impacted by a pretax charge of $34 million (pre-tax and mostly non-cash) related to a litigation settlement concerning our membership renewal policy.”

For the past 36-week, year-to-date period, net sales increased 10%, to $52.66 billion, from $48.00 billion during the same period last year.

Also up were comps – 7% for the total company, 4% in the U.S. and 21% in the international division. Excluding the positive impacts from gasoline inflation and the strengthening of foreign currencies, comps rose by 3% for the total company, 2% in the United States and 9% in international.

Year-to-date net income was $871 million, or $1.95 per diluted share, compared to net income for the first thirty-six weeks of fiscal 2009 of $712 million or $1.62 per diluted share.