Costco Net Rises 19.1 Percent; Home Provides a Boost
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ISSAQUAH, Wash.-Sales of home products helped Costco improve its third-quarter performance, with net income jumping 19.1 percent to $386 million.
Net sales rose 8.2 percent to $21.8 billion in the quarter, which ended on May 6. This included an overall same-club sales gain of 5 percent, which in itself included a high single-digit same-club increase in softlines. Strong sales in small appliances and domestics were a factor in the softlines gain, according to Richard Galanti, Costco's executive vice president and chief financial officer, who commented on the third-quarter results in a conference call yesterday to financial analysts.
Gross margin picked up four basis points to finish the quarter at 10.6 percent. Selling, general and administrative expenses were up 8 percent in dollars but down two basis points as a percentage of sales, to 9.8 percent.
Galanti told the analysts that Costco has opened 10 new units thus far in its current fiscal year, bringing its worldwide count to 602 as of the end of the third quarter. The company plans to open a further six in the final quarter of the fiscal year, he said.