Costco Q1 profit gains 17 per­cent

The Pak Banker - - Company& -

NEW YORK: Costco Whole­sale Corp., the largest U.S. ware­house-club chain, posted a 17 per­cent in­crease in first-quar­ter profit as sales of gaso­line and fresh food boosted rev­enue.

Net in­come climbed to $312 mil­lion, or 71 cents a share, in the pe­riod ended Nov. 21, from $266 mil­lion, or 60 cents, a year ear­lier, the Is­saquah, Washington-based com­pany said to­day in a state­ment. An­a­lysts pro­jected 69 cents a share, the av­er­age of 22 es­ti­mates com­piled by Bloomberg.

Costco has lifted sales since the re­ces­sion by lur­ing bar­gain-hun­gry con­sumers to pay for mem­ber­ship, which al­lows shop­pers and small busi­nesses to buy dis­counted goods in­clud­ing gro­ceries and tele­vi­sions. The re­tailer in­creased mem­bers 3.6 per­cent to 58 mil­lion in the year through Au­gust.

"This has been a strong fun­da­men­tal story for a long time, even pre-re­ces­sion, and it's pick­ing up right where it left off," Matt Arnold, an an­a­lyst for Ed­ward Jones & Co. in Des Peres, Mis­souri, said be­fore the re­sults. Arnold rec­om­mends hold­ing Costco shares.

Rev­enue at stores open at least a year, ex­clud­ing fluc­tu­a­tions in gaso­line prices and cur­rency ex­change rates, rose 5 per­cent, Costco said on Dec. 2. Sales at its 157 stores out­side the U.S. ad­vanced 10 per­cent, while sales at the 425 lo­ca­tions in the U.S. and Puerto Rico gained 3 per­cent.

Costco rose 45 cents yes­ter­day to $69.64 in Nas­daq Stock Mar­ket trad­ing. The stock has gained 18 per­cent this year, while com­peti­tor BJ's Whole­sale Club Inc. has gained 44 per­cent. Wal-Mart Stores Inc., the world's largest re­tailer and op­er­a­tor of whole­saler Sam's Club, has climbed 3.1 per­cent in 2010. To­tal rev­enue, in­clud­ing mem­ber­ship fees, rose to $19.2 bil­lion at Costco. An­a­lysts pre­dicted $18.8 bil­lion, the av­er­age of 16 es­ti­mates. -Bloomberg

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