Costco closes the books on fiscal year with a profit drop

Issaqua, Wash. – Costco Wholesale Corp. posted profit declines during the fourth quarter and fiscal 2009 performance.

"Fiscal 2009 results, including those of the fourth quarter, were negatively impacted by these previously reported factors: on-going softness in U.S. sales, primarily the result of a weak economic environment; higher employee benefit costs, mainly consisting of higher health care eligibility and usage; and lower U.S. dollar amounts of international profits as a result of weaker foreign currencies,” said Richard Galanti, cfo during the company’s quarterly conference call today.

Net income for the fourth quarter ended Aug. 30 fell 6.0% to $374 million, or $.85 per share. Costco said earnings were boosted by a LIFO credit of $17 million, or 2 cents per share, after-tax.

Sales for the 16-week period slipped 3.0% to $21.89 billion. Comps for the quarter declined 6% in the U.S. and 3% internationally, and went down 5% for the total company. Excluding the negative impacts from gasoline deflation and foreign exchange (primarily in Canada, the United Kingdom and Korea), comps declined during the quarter 1% in the U.S., increased 7% internationally and rose by 1% for the total company.

For the full fiscal year, net income fell 14.8% to $1.09 billion, or $2.47 per share. The results included: a $32 million pretax LIFO credit, reversing the prior year's $32 million pretax LIFO charge; a $23 million pretax mark-to-market charge to the cash surrender value of some life insurance contracts; and a $34 million pretax third-quarter charge related to a litigation settlement concerning Costco’s membership renewal policy.

Sales for the 52-week fiscal period fell 2.0% to $69.89 billion. Comps declined 2% in the U.S. and 8% internationally and went down 4% for the total company. Excluding the negative impacts from gasoline deflation and foreign exchange, comps increased 1% in the United States, 7% internationally and 3% for the total company.

In other news, the 560-unit warehouse club – which operates 407 stores in the United States and Puerto Rico, 77 in Canada, 21 in the United Kingdom, seven in Korea, six in Taiwan, nine in Japan, 32 in Mexico and one in Australia – is planning on opening its first location in Manhattan.

This new site, set to host a grand opening event on Nov. 11, is the company’s third in New York City – the other two are in Queens’ Long Island City neighborhood and in Brooklyn.

Home & Textiles Today Staff | News & Commentary

 Home Textiles Today is the market-leading brand covering the home and textiles markets, offering a comprehensive package of print and online products. Home & Textiles Today provides industry news, product trends and introductions, exclusive industry research, consumer data, store operations solutions, trade show news and much more.

Featured Video

  • Live From New York: Fashion Comes Across the Pond

    Camera Icon More Videos

Subscribe to
Home & Textiles Today eDaily
Receive the news you need to know about the trends in the industry delivered right to your inbox.


HTT Cover October 2017

See the October 2017 issue of Home & Textiles Today. In this issue, we look at the Top 25 Online Retailers.  H&TT's exclusive annual ranking of the biggest online sellers of home textiles finds that while pure play etailers continue to fly, bricks & clicks are digging into omnichannel. See details!