Costco Wholesale Corp. (NASDAQ: COST) reported on Thursday that fiscal third quarter profit rose 19% as its top line was boosted by robust growth in comparable-store-sales.
The Issaquah, Washington-based Company, which sells goods at much lower prices than other retailers, has benefitted in recent quarters as consumers preferred buying daily necessities in bulk at its warehouse clubs in the backdrop of macroeconomic uncertainty and wobbly job market outlook. Also, Costco sells gasoline at cheaper prices than pumps, which helped increasing customer traffic at its clubs. Nevertheless, last month, the warehouse club operator’s comparable-store-sales in the U.S. (excluding gas) missed analysts’ consensus estimate. Costco’s sales, just like any other retailer were impacted due to unusually cold weather conditions in North America during early April. Harsh weather conditions prompted consumers to postpone their shopping.
For the fiscal third quarter ended May 12, Costco reported net income of $459 million or $1.04 a share compared to a profit of $386 million or 88 cents a share. Total revenue soared 7.9% to $24.08 billion. Analysts’ consensus estimate was for earnings of $1.03 a share on revenue of $24.21 billion, according to a data compiled by Thomson Reuters. Revenue from membership fees climbed 12% in the fiscal third quarter to $531 million.
After adjusting the impact of currency fluctuations and rise in gasoline prices, total comparable-store-sales rose 7%. In the U.S. as well, comparable-store-sales increased 7%, excluding the impact of currency and gasoline price fluctuations.
Although operating margin improved to 3% in the recently concluded quarter from 2.8% in the year-earlier quarter, merchandising costs rose 7.6%.
For the 9 month period ended May 12, total revenues rose to $72.67 billion from $66.92 billion in the same period last fiscal. Net sales for the period increased 8% to $71.10 billion while comparable-store- sales climbed 6%. U.S. Comparable-store-sales sales jumped 6 percent.
The Company expects to open nine new warehouse clubs by the end of fiscal 2013. Costco currently operates 627 warehouses.