Home Slumping at Costco
By Cecile B. Corral -- Home Textiles Today, 3/10/2008
Issaquah, Wash. — Home furnishings was the weakest category in softlines at Costco Wholesale Corp. in its second quarter, the 534-unit warehouse club reported during its earnings call last week.
"Discretionary types of non-food items tend to be the weakest in this economy, even though overall we're doing OK," said Richard Galanti, evp, cfo.
Net sales rose 12% to $16.62 billion in the quarter ended Feb. 17, while year-to-date sales were up 12% to $32.09 billion. Comps gained by 7% in each period.
Net income of $327.9 million for the quarter was up 31.4%, while half-year income of $589.8 million showed a 21.2% gain over the year-ago period.
To the advantage of the otherwise lackluster home business, Galanti said the company's buyers have taken note of the availability of more branded goods in the home furnishings and furniture categories.
Costco operates 391 clubs in the U.S. and Puerto Rico, 75 in Canada, 19 in the U.K., six in Korea, five in Taiwan, seven in Japan and 31 in Mexico.
