Costco Wholesale Corp's third-quarter profit rose as the company
continues to benefit from low gas prices, strong store sales and
membership fees.
The second-largest retailer in the U.S. behind Wal-Mart Stores
Inc. and one of the largest fuel retailers in the country, Costco
has benefited from lower fuel prices and improving store sales and
membership fees. Last month, the company paid a special one-time
dividend of $5 a share, or $2.2 billion in all.
Costco has also ended its exclusive partnership with American
Express Co., under which Costco only accepted AmEx cards, and
reached a similar arrangement with Citigroup Inc. under which the
retailer now only accepts Visa-branded credit cards. It continues
to accept Visa and MasterCard debit cards.
The company, which started in 1983 in Seattle, now has 673
membership warehouses around the world and boasts a loyal
membership with a renewal rate of about 91% in the U.S. and Canada
and about 87% worldwide as of 2014, according to a regulatory
filing. Members can use their cards at any location around the
world.
Costco said sales at established stores, a key metric that looks
at sales at stores opened for at least a year along with online
sales on sites operating for more than a year, fell 1% from the
year earlier. In the U.S., sales at established stores rose 1%.
Excluding negative impacts from gasoline price deflation and
foreign exchange, comparable sales rose 6% for the 12-week period
while up 5% at U.S. stores.
Overall, Costco reported a profit of $516 million, or $1.17 a
share, up from $473 million, or $1.07 a share, a year earlier.
Revenue rose to $26.1 billion as net sales rose 1% and revenue
from membership fees rose to $584 million. Merchandise costs were
$22.7 billion.
Analysts surveyed by Thomson Reuters had expected a profit of
$1.15 a share and revenue of $26.63 billion.
Write to Maria Armental at maria.armental@wsj.com
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