Sales up, profits down at Costco
June 4, 2001-- Home Textiles Today,
ISSAQUAH, WA — With costs climbing higher and margins trailing, third-quarter profits fell by 11.5 percent at Costco Wholesale Corp., to $105.3 million from $120.3 million last year, even though sales climbed at a double-digit pace.
Sales at the warehouse club operator advanced by 11.7 percent, to $7.6 billion from $6.7 billion. Same-store sales improved by an impressive 5 percent. Costco said revenues from membership fees shot up by 23.2 percent, to $155.4 million from $126.0 million.
However, average gross margin tightened by 30 basis points, to 9.8 percent from 10.1 percent a year ago. And expenses climbed by 40 basis points, to 9.3 percent from 8.9 percent. Despite the big improvement in sales, operating profits dropped by 12.1 percent, to $174.7 million from $198.7 million.
For the nine months year to date, profits were off by 4.6 percent, to $411.4 million from $431.3 million, even though sales moved up by 9.5 percent, to $23.2 billion from $21.2 billion, adding more than two billion dollars to the top line.
Costco Wholesale Corp.
|Qtr. 5/13 (x000)||2001||2000||% CHG|
|Oper. income (EBIT)||174,650||198,710||-12.1|
|Per share (diluted)||0.23||0.26||-11.5|
|Average gross margin||9.8%||10.1%||—|
|Oper. income (EBIT)||675,845||714,743||-5.4|
|Per share (diluted)||0.88||0.92||-4.3|
|Average gross margin||10.4%||10.4%||—|