Costco Wholesale’s profit for the fiscal second quarter climbed 39 percent as the Issaquah company pulled in more money from membership fees, saw sales improve and recorded a large tax benefit.
The results beat Wall Street expectations and pushed Costco’s stock up $1.31, or 1.3 percent, to $103.75 Tuesday. The shares are near the high end of their 52-week range of $81.98 to $105.97.
The wholesale-club operator earned $547 million, or $1.24 a share, for the period ended Feb. 17. That compared with
$394 million, or 90 cents a share, a year earlier.
The current quarter included a tax benefit of $62 million, or
14 cents a share, related to part of the special dividend the company paid in December to its 401(k) participants.
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Even without the tax benefit, the results beat the $1.06 per share that analysts polled by FactSet expected.
Revenue climbed 8 percent to $24.87 billion from $22.97 billion. Wall Street predicted $24.85 billion.
Costco said revenue from membership fees increased
15 percent to $528 million from $459 million. About half of that gain came from fee increases, Chief Financial Officer Richard Galanti said on a conference call with analysts.
Revenue at stores open at least a year rose 5 percent. The figure also climbed
5 percent in the U.S. and increased 6 percent overseas. Revenue at stores open at least a year is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed.
Taking out higher gas prices and stronger foreign currencies, revenue at stores open at least a year rose
5 percent for the total company and in the U.S. The metric increased 4 percent internationally.
That’s a better performance than some of its retailing rivals: Revenue by similar measures rose 1.2 percent at Wal-Mart Stores in the U.S. and 0.4 percent at Target in their most recent quarters.
Costco runs 622 warehouses, including 448 in the U.S. and Puerto Rico, 85 in Canada, 32 in Mexico, 23 in the U.K., 13 in Japan, nine in Taiwan, nine in South Korea and three in Australia. The company plans to open up to an additional 14 new warehouses before its fiscal year ends Sept. 1.
Information from Bloomberg News is included in this report.