ISSAQUAH, Wash. — Costco Wholesale Corp. here said last week inflation in gasoline prices helped boost comparable-store sales in the U.S. to 6% during the third quarter that ended May 11 — a figure that would have been up only 4% without the boost provided by fuel.
The company said the average price per gallon of gasoline rose 20% since last year's third quarter.
Richard Galanti, executive vice president and chief financial officer, told analysts during a conference call that roughly 30% of members who come to Costco for gas also go into the warehouse, “though it's not clear whether they were planning to come in anyway,” he noted. Gasoline accounts for 10% of Costco sales, he added.
Net income rose 31.7% to $295.1 million for the 12-week quarter, and 24.7% to $885 million for the year to date. Sales increased 13.3% to $16.6 billion for the quarter and 12.4% to $49.4 billion for the 36-week period.
With food and sundries accounting for about half of Costco's sales, and fresh foods representing another 13%, he said third-quarter comps for those two categories combined were better than the company's overall results.
He said those categories were up in the middle to high single digits, with deli and grocery leading the way. “Fresh foods continue to do well,” he noted, “and all subcategories are just fine.”
Regarding overall price inflation, Galanti said Costco holds prices as long as it can and will always be the last to raise them. “If we feel the need to raise a price on a very competitive item, we won't be the first ones to do it. Although customers expect us to pass through inflationary increases, we will never move before a competitor.”
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