“Costco Wholesale Corp.’s COST -0.59% quarterly earnings jumped 39% as the wholesale club recorded strong revenue growth and also saw its bottom line buoyed by a one-time tax benefit.
Costco’s sales have mostly topped Wall Street’s expectations in recent quarters, thanks in part to a shaky economy encouraging shoppers to make bulk purchases at its warehouse clubs, which can be less expensive than other outlets. Costco also sells its gasoline for less than area pumps, which has contributed to higher traffic at its clubs. But like many other retailers, Costco has faced rising costs for merchandise, a trend that continued in the latest quarter.
Ahead of the company’s earnings release, analysts at William Blair pointed to the company’s same-store sales gain for February, saying same-store traffic growth continues to be driven by growth in food and consumables. The firm said that unlike large-cap discount peers such as Target Corp. TGT +1.49% and Wal-Mart StoresInc., WMT -0.07% who recently logged weaker sales in February, Costco continues to generate consistent, strong growth across all general merchandise categories, which William Blair said is a reflection of its low e-commerce risk profile.
Tuesday, Costco reported that total same-store sales were up 5% for the period, excluding currency fluctuations and inflation in gasoline price.
For the quarter ended Feb. 17, the company reported a profit of $547 million, or $1.24 a share, versus a year-ago profit of $394 million, or 90 cents a share. The latest quarter included a $62 million, or 14-cents-a-share tax benefit in connection with the portion of a special cash dividend paid by the company in December.
Total revenue jumped 8.3% to $24.87 billion. Analysts polled by Thomson Reuters expected earnings of $1.06 a share on $25.03 billion in revenue.
Revenue from membership fees rose 15% to $528 million. In November of 2011, Costco raised membership fees by 10% in the U.S. and Canada, the first increase in five years.
Operating margin narrowed a hair to 97% from 97.1%. Merchandise costs increased 8.1%, while selling, general and administrative expenses rose 8.4%….”
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