Costco's 2Q a period of increases in net income, sales and comps

Home Textiles Today Staff -- Home Textiles Today, 3/2/2011 3:29:20 PM

Issaquah, Wash. - Costco Wholesale Corp. today reported gains in net sales, net income and comp club sales for its second quarter.

The 581-unit club's net income for the quarter 16.4% to $348 million, or $.79 per diluted share, compared to $299 million, or $.67 per diluted share, in the same period last year.

Net sales increased 11% to $20.45 billion from $18.36 billion during last year's second quarter. This year's results include sales from the company's 50% owned Mexico joint venture, as Costco began consolidating its Mexico operations on a prospective basis beginning with its 2011 fiscal year. Mexico sales accounted for approximately three percentage points of the increase for both the quarter and the year-to-date sales.

Comparable sales for the quarter, including Mexico operations for both this and last year, were up 5% in the U.S. division, 12% in international, and 7% for the total company. Excluding the positive impacts inflation in gasoline prices and strengthening foreign currencies, comps increased by 3% in the U.S., 8% in the international division, and 4% for the total company.

Year to date, net income grew 16.8% to $660 million, or $1.49 per diluted share, compared to $565 million, or $1.27 per diluted share, in 2010's first half. The quarter last year included a $22 million pre-tax charge ($0.03 per diluted share) related to a change in employee benefits. Costco noted the consolidation of the Mexico joint venture had no impact on net income or earnings per share attributable to the company.

For the 24 weeks, net sales increased 11% to $39.27 billion, from $35.28 billion last year. And comp sales, including Mexico operations for both this and last year, grew 5% in the U.S. division, 13% in international, and 7% for the total company. Excluding the positive impacts inflation in gasoline prices and strengthening foreign currencies, comps increased by 3% in the United States, 9% in the international division, and 5% for the total company.