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Costco Q3 profit drops
01
Jun '09
Costco Wholesale Corporation announced its operating results for the third quarter (12 weeks) and first thirty-six weeks of fiscal 2009, ended May 10, 2009. Net sales for the third quarter of fiscal 2009 declined five percent, to $15.48 billion, from $16.26 billion during the third quarter of fiscal 2008. Net sales for the first thirty-six weeks of fiscal 2009 declined one percent, to $48.00 billion, from $48.35 billion during the first thirty-six weeks of fiscal 2008.

Comparable sales for the fiscal third quarter and first thirty-six weeks of fiscal 2009 were as follows:
12 Weeks
U.S.: -5%
International: -12%
Total: -7%

36 Weeks:
U.S.: -1%
International: -10%
Total: -3%

Comparable sales for the 12-week and 36-week periods, excluding the negative impacts from gasoline deflation and foreign exchange (primarily in Canada, the United Kingdom and Korea), were as follows:

12 Weeks
U.S. (w/o gas deflation): 0%
International (w/o Fx): +8%
Total: +2%

36 Weeks:
U.S. (w/o gas deflation): +2%
International (w/o Fx): +8%
Total: +4%

Net income for the third quarter of fiscal 2009 was $209.6 million, or $.48 per diluted share, compared to $295.1 million, or $.67 per diluted share, during the third quarter of fiscal 2008. Net income for the first thirty-six weeks of fiscal 2009 was $711.8 million, or $1.62 per diluted share, compared to net income for the first thirty-six weeks of fiscal 2008 of $884.9 million, or $1.99 per diluted share.

Richard Galanti, Chief Financial Officer of Costco, stated that "third quarter 2009 earnings results were negatively impacted by several factors, including: a pretax charge of $34 million (mostly non-cash) related to a litigation settlement concerning our membership renewal policy; higher employee benefits costs, mainly consisting of higher health care usage; lower international profits, a result of the significant strengthening of the U.S. dollar when compared to the currencies of Canada, the United Kingdom, Korea and Mexico; and lastly, ongoing weakness in sales, particularly sales of higher-ticket, discretionary items."

Costco Wholesale Corporation

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