Costco Wholesale Corp posted strong comparable store sales and earnings in the third quarter, noting its members are ramping up their spending on discretionary merchandise.
Net income for the quarter was $1.68 billion, or $3.78 per diluted share, versus $1.3 billion, or $2.93 per diluted share, During the year-before period. In the year past third quarter, Costco incurred a non-recurring charge to merchandise costs of $298 million pretax, or 50 cents per diluted share, primarily for the discontinuation of charter shipping activities.
An analyst consensus estimate published by Yahoo Finance forecast earnings per diluted share of $3.70 and revenues of $58.07 billion.
With the effects of changes in gasoline price and foreign exchange rates excluded, the company noted comparable store sales increased 6.5% in the quarter year over year, with comps in the United States up 6%, comps in Canada up 7.4% and comps in other international markets up 8.5%. E-commerce comps gained 20.7%.
Net sales were $57.39 billion, and revenues, including membership fees, were $58.52 billion versus $52.6 billion and $53.65 billion, respectively, from the year-prior quarter. Operating income was $2.2 billion versus $1.68 billion in the year-earlier period.
In a conference call, Gary Millerchip, Costco executive vice president and CFO, said club traffic in the U.S. advanced 5.5% as average ticket gained 0.7%.
Of major merchandising categories, nonfoods posted the highest comp gains, he said. “As inflation has leveled off, our members are returning to purchasing more discretionary items, and growth in the category was led by toys, tires, lawn and garden, and health and beauty aids,” Millerchip said.
