PORTLAND, Ore.- Costco Wholesale Corp. said its first-quarter net income rose 17 percent — even faster than revenue — with help from higher gas prices andrising sales of high-profit items.
The nation's biggest wholesaleclub operator has done well compared with many retailers during theweak economy, as Americans increasingly turned to it for deals oneveryday necessities such as food. Recently, shoppers have made morediscretionary purchases in the clubs too.
Costco said Wednesdaythat its net income jumped 17 per cent to US$312 million, or 71 centsper share, for the period ended Nov. 21. It was $266 million, or 60cents per share, a year earlier.
Revenue rose 11 per cent to $19.24 billion.
Theresults beat the average forecast from analysts surveyed by ThomsonReuters for earnings of 69 cents per share on revenue of $18.81 billion.
Costcosaid food sales remained strong. The company said it is beginning tosee increases in some food ingredient prices but that did not directlyaffect the results yet. Shoppers also began to pick up more smallappliances and home furnishings as they relaxed their spending habitssome.
The company, based in Issaquah, Wash., also saw strong performance in other countries.
Revenueat clubs open at least a year climbed seven per cent, withinternational results up 14 per cent and U.S. results rising five percent. This metric is a key indicator of a warehouse club operator'shealth because it excludes stores that opened or closed over the pastyear.
Those results were helped by higher gasoline prices andstronger foreign currency. Excluding those, revenue at clubs open atleast a year would have climbed five per cent, with internationalresults rising 10 per cent and U.S. results rising four per cent.
Costco also said membership renewal rates are up for the quarter and new memberships were up one per cent.
CFORichard Galanti said Costco has approached the Christmas seasonaggressively, changing its product lineup as early as September. Hesaid that, although Costco does not offer massive Black Fridaydiscounts like many other retailers, early signs for the season arethat Costco's members will keep buying discretionary items.
Costco does not issue quarterly earnings guidance.
Shares of Costco fell 67 cents to $68.97 in afternoon trading after an early morning swell.
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AP Retail Writer Michelle Chapman contributed to this report from New York.