Costco looks toward expansion as holidays near

ISSAQUAH, Wash. — A strong dollar and tumbling gas prices made Costco’s fourth quarter sales results seem weak. They weren’t and now the company plans to open 12 more clubs before year end.

Costco said total sales for its fourth quarter ended Aug. 30 increased 1% to $35 billion and same store sales declined 1%. Strip out the negative effects of a strengthening dollar and gas prices that were dramatically lower during Costco’s fourth quarter when compared to the prior year and total company and U.S. same store sales increased 6%.

Aided by membership growth, net income during the quarter increased 10% to $767 million from $697 million. Earnings per share increased 9.5% to $1.73 from $1.58 which was considerably better than analysts consensus estimate of $1.66. Membership income during the period increased 2.2% to $785 million.

For the full year, Costco’s sales increased 3% to $113.7 billion from $110.2 billion the prior year. Full year net income grew increased to $2.38 billion, or $5.37 per share, compared to $2.06 billion, or $4.65 per share, last year. Full year membership income increased 4.3% to $2.5 billion.

Costco ended the year with 686 warehouses worldwide, including 480 in the United States and Puerto Rico, 89 in Canada, 36 in Mexico, 27 in the United Kingdom, 23 in Japan, 12 in Korea, 11 in Taiwan, seven in Australia and one in Spain. The company said it plans to open 12 more locations before the end of the calendar year.