Costco profits drop

Profits at warehouse club retailer Costco fell in the quarter to February 12 compared with a year earlier, when the US giant had a large gain from a tax benefit. However, sales rose after a strong finish to the holiday shopping season.

Profits for the quarter were US$296.2 million (£168.9 million), a 3 per cent drop compared with US$305.5 million (£174.2 million) the year before.

Sales rose 11 per cent to US$13.78 billion (£7.86 billion) in the quarter, while total revenue, including membership fees, amounted to US$14.05 billion (£8.01 billion).

Costco also reported that February like-for-like store sales rose 8 per cent, while total sales during the month rose 11 per cent to US$4.21 billion (£2.4 billion). International sales increased 10 per cent.

Costco operates 471 warehouses, including 346 in the US and Puerto Rico, 66 in Canada, 17 in the UK, five in Korea, four in Taiwan, five in Japan and 28 in Mexico.

The retailer plans to open an additional 18 to 20 warehouses, including the relocation of two to three warehouses to larger and better-located facilities, prior to the end of its 2006 fiscal year, which ends on September 3.