Blowout quarter for Costco
Costco Wholesale Corp. came roaring back in its third quarter as it topped analysts' earnings and sales expectations amid strong U.S. sales.
After missing Street estimates for earnings and revenue in its second quarter, Costco returned to form in its third quarter. The warehouse club giant's net income jumped 28%, to $700 million in the quarter ended May 7. Earnings per share of $1.59 topped analysts' predictions of $1.31 per share. Excluding items, Costco earned $1.40 per share, still more than expected. The company recorded a tax benefit of 19 cents per share related to a special cash dividend announced in April.
Net sales rose 8% to a better-than-expected $28.22 billion in the quarter. Total same-store sales rose 5%, with a 6% increase in the United States, also more than anticipated.
Total membership fees collected rose 4%, to $644 million, which was down slightly from the second quarter. Some analysts had expected a bigger lift since the retailer is set to increase its member fee come June 1.
For the six months ending May 7, Costco's net sales were up 5.6% year-over-year to $84.8 billion. The company's half-year diluted earnings came in at $3.99 a share, a 12% increase year-over-year.
Costco opened four new locations in the quarter, including its first-ever outpost in Iceland. It ended the period with 732 stores worldwide.
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