It might not be recessionary-proof, but Costco doesn't seem to be hurting much either as consumers pinch pennies in a tough economic climate...

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It might not be recessionary-proof, but Costco doesn’t seem to be hurting much either as consumers pinch pennies in a tough economic climate.

Chief Financial Officer Richard Galanti told Wall Street analysts Wednesday that Costco’s warehouse stores rang up sales more frequently and for more money on average during the past three months than a year ago.

Sales of food and sporting goods were especially strong, though consumers pulled back on such discretionary items as furniture and jewelry, Galanti said.

Overall, Issaquah-based Costco turned in another solid performance, recording a second-quarter profit in line with Wall Street’s expectations. For the three months that ended Feb. 17, Costco pocketed $327.9 million, or 74 cents a share, up 31 percent from $249.5 million, or 54 cents a share, a year ago.

Excluding $53.4 million in charges for the second quarter of 2007, Costco’s per-share profit would have been up 12 percent from 66 cents a year ago.

Still, Wall Street seemed unimpressed, sending shares of Costco down $1.56 to end Wednesday at $60.83. Its shares have been trading between $72.68 and $51.52 during the last 52 weeks.

Stephanie Hoff, a senior retail analyst at Edward Jones in St. Louis, said the decline probably reflects analysts’ concerns about Costco’s profit margin, which remained flat on a year-over-year, adjusted basis.

Some analysts suggest that Costco’s prices are lower than necessary to attract customers, though Hoff said they help to explain why the company “should hold up well in a recession.”

“The company is performing quite well,” said Hoff, who rates Costco stock a “buy.” “There are reasons to be shopping in its stores.”

Costco is enjoying brisk apparel sales, Galanti said. In contrast, Everett-based Zumiez, a mall-based retailer of action-sports apparel and shoes, reported a 2.6 percent decline in its February same-store sales Wednesday. Galanti credited an “availability of higher-end, branded goods that manufacturers” previously were unwilling to sell to Costco.

“If you go in a Costco today, you’re going to see Crocs,” Galanti said in an interview, referring to a popular brand of casual shoes. “Generally, they retail at $30 to $40. We’re selling them in the low $20s. Just in the past few weeks, we received delivery of over 500,000 pairs.”

Net sales, which do not include membership fees, rose 12 percent to $16.62 billion from $14.8 billion a year ago. Costco benefited from higher gasoline prices at pumps at its stores and favorable foreign-exchange rates resulting from a weak U.S. dollar. Sales made in stronger currencies outside the U.S. adjust upward when translated to U.S. dollars.

Costco’s per-share profit matched analysts’ expectations, but its sales were slightly below the $16.85 billion that Wall Street predicted.

Sales at stores open at least a year, a key measure of retailer performance, increased 7 percent in the second quarter and for the month of February, with a noticeable pickup in the last two weeks, Galanti said.

Costco operates 534 warehouse stores, including 391 in the U.S. and Puerto Rico, 75 in Canada, 19 in the United Kingdom, six in Korea, five in Taiwan, seven in Japan and 31 in Mexico. The retailer plans an additional 16 to 18 new stores by the end of its fiscal year on Aug. 31, counting four or five relocations.

“We have not slowed down our expansion,” Galanti said. “If anything, we’re seeing a few more opportunities” as other retailers abandon some development plans and large tracts of land scheduled for housing flip “back to the banks.”

Looking ahead, Galanti said he’s “comfortable” with Wall Street’s projected profit-per-share of $2.99 for fiscal 2008. He described its prediction of 65 cents a share for the third quarter as OK, though “at the high end of a small range.”

“There’s that terrible thing called the economy out there, so we’ll have to see,” he said.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com