Costco membership jumps and so does Q3 profit

[May 25, 2011]  ISSAQUAH, Wash. (AP) -- Costco's net income rose 6 percent in its fiscal third quarter, the company said Wednesday, with growing membership numbers pushing sales both at home and abroad.

The nation's biggest wholesale club has been among the top performers during the down economy and now, with more discretionary income in the pockets of shoppers, Costco had capitalized on the additional free spending.

Costco posted earnings of $324 million, or 73 cents per share, for the period ended May 8. That's up from $306 million, or 68 cents per share, a year ago.

The current quarter's results included an inventory charge of 7 cents per share.

Analysts polled by FactSet, who typically exclude one-time charges, expected earnings of 77 cents per share.

Revenue climbed 16 percent to $20.62 billion from $17.78 billion, just edging out Wall Street expectations.

Costco said its results included sales from its 50 percent owned Mexico joint venture, which accounted for 3 percentage points.

Sales at stores open at least a year increased 12 percent, with the figure up 10 percent in the U.S. and 18 percent internationally.

Removing the impact of rising gasoline prices and strengthening foreign currencies, sales at stores open at least a year gained 7 percent. The metric climbed 6 percent in the U.S. and 11 percent overseas.

Sales at stores open at least a year is a key gauge of a retailer's health because it excludes results from stores opened or closed during the year.

Costco Wholesale Corp., based in Issaquah, Wash., currently runs 581 warehouses, including 425 in the U.S. and Puerto Rico, 80 in Canada, 32 in Mexico, 22 in the U.K., seven in Korea, six in Taiwan, eight in Japan and one in Australia.

[Associated Press]

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