Costco fiscal 2007 earnings top $1 billion

ISSAQUAH, Wash. Costco reported stronger-than-expected fourth-quarter sales that boosted earnings for its full year over $1 billion.

In an Oct. 10 conference call, Costco reported $372.4 million in earnings for its fourth quarter ended Sept. 2 and $20.09 billion in revenue. Same-store sales during the quarter rose 5 percent.  For the full year, Costco reported $1.08 billion in earnings—just below the record $1.1 billion posted in fiscal 2006—and $60.9 billion in revenue.

Costco’s pharmacy sales totaled $2.72 billion, an increase of 7.9 percent from 2006. Prescription sales generated $1.35 billion in revenue—a 7.5 percent increase over last year—while OTC sales increased 8.1 percent to $1.37 billion.

Margins increased in most categories at Costco this year, including pharmacy. “Pharmacy margins were up a little year over year, not withstanding the effects of Medicare Part D and competitive issues with generics,” said Costco executive vice president and chief financial officer Richard Galanti.  Costco opened 25 new stores in the United States during the year.

Costco got off to a good start for fiscal 2008 with a 6 percent jump in September same-store sales, rebounding from a weak 2 percent increase in August. There are some concerns about the economy heading into next year, but Galanti said its September sales have Costco “pretty optimistic about the year so far.”