ISSAQUAH, Wash. — Costco Wholesale Corp. here said Wednesday it would accelerate warehouse openings next year to between 27 and 30 — its biggest expansion since 2007.
Capital spending will increase between 20% and 33% — to between $1.8 billion and $2 billion, compared with $1.5 billion spent in fiscal 2012 to open 16 locations, Richard A. Galanti, executive vice president and chief financial officer, told analysts during a conference call to discuss financial results for the year and fourth quarter ended Sept. 2.
"After several years of under-opening locations, we feel very good about this coming year," Galanti said. "We had a slide over the last five years, but now we've got a lot more irons in the fire, particularly in those countries where the lead time to get openings done is longer."
He said Costco plans to open 14 warehouses before the end of the calendar year encompassing nine in the U.S., three in Canada, one in England and one in South Korea. Of the 16 locations that opened in 2012, 10 were in the U.S., four were in Japan, one was in South Korea and one was in Taiwan.
Net income for the 17-week fourth quarter rose 27.4% to 609 million, compared with the prior year's 16-week quarter, or $1.39 per share, while sales increased 14.2% to $31.5 billion and comparable sales, excluding gas and the impact of foreign currencies, rose 6%.
For the 53-week year, net income increased 16.9% to $1.7 million, compared with a 52-week prior year, or $3.89 per share; sales were up 11.5% to $97.1 billion; and comps, excluding gas and the impact of foreign currencies, climbed 6%.
Read more: August Comps Up at Costco, Target
Comps in food and sundries increased in the mid-single-digit range, and comps on fresh foods rose in the mid- to high single-digit range, with the strongest results in deli and produce, Galanti said; inflation on fresh foods was in the low single-digit range, he added. Overall comps were strongest in the Northwest and the Midwest, he noted.
Galanti said some of the rise in fresh food sales was due to the introduction of Kirkland Signature private-label products as well as to more organic items. "If we can make $20 million to $30 million off sales of organic ground beef, that's good for us, and we have the kind of member who sees a higher price point but recognizes the greater relative value because that's an items that isn't as competitive out there. So we can provide the customer more and do more."
Among the 608 Costco warehouses in operation in fiscal 2012, average sales per location rose 7% to $154 million, compared with $146 million in fiscal 2011, Galanti noted.
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