NEW YORK — Costco Wholesale Corp. on Thursday registered double-digit gains for both the fourth-quarter and year-end periods, citing gains in new memberships and increased sales at Costco Online.
The warehouse club said that for the three months ended Aug. 29, net income rose 23.9 percent to $296.8 million, or 62 cents a diluted share, from $239.4 million, or 51 cents, in the same year-ago quarter, while total revenues rose 10.6 percent to $15.1 billion. The revenue results include a sales increase of 10.6 percent to $14.8 billion and an increase in membership fees by 12.3 percent to $306,362. Same-store sales gained 8 percent in the quarter.
Richard Galanti, chief financial officer, told Wall Street analysts in a conference call that Costco Online posted a 64 percent sales increase for both the quarter and the year. The operation generated $388 million in sales for the year.
“In terms of sales comparisons by geographic region, generally speaking, the established longer-term U.S. regions like the West Coast and parts of the Atlantic, Mid-Atlantic and Northeast were up in the 5 to 7 percent range, about 6 percent overall. The newer regions, which include parts of the Southeast as well as Texas and the Midwest, were up in the mid to high teens, and in fact Texas was actually in the low 20s,” the cfo said.
He said the club saw strong renewal rates in the quarter. For the year, there were 15 million Gold Star members and 4.8 million primary business members. Adding 3.6 million business add-ons and the free spouse cards, there were a total of 42.4 million people holding a Costco membership card in their wallets at the company’s fiscal year-end.
Costco sells a wide range of merchandise, from apparel to accessories, books and a variety of consumables. The cfo said 15 percent of its sales are private label merchandise, which represents 8 percent of the stockkeeping units.
In addition, Costco added ancillary businesses to its operation during the fourth quarter: eight more pharmacies added to the 359 it already operates; seven more food courts to the already existing 412; eight optical centers added to the established 397, and six gas stations for a total of 211 throughout the company’s sites. Hearing aid centers held steady, while one print copy center was shuttered, leaving 10 in operation.
“These businesses are profitable. They drive our overall business,” Galanti said.
For the fiscal year-end period, income was up 22.4 percent to $882.4 million, or 1.85 cents a diluted share, from $721,000, or $1.53, a year ago. Total revenue rose 13.1 percent to $48.1 billion from $42.5 billion, which includes a 13.1 percent gain in sales to $47.1 billion from $41.7 billion and a 12.7 percent jump in membership fees to $961,280 from $852,853. Comps for the year increased 10 percent.
— Vicki M. Young