Costco Wholesale Corp., the largest U.S. warehouse-club chain, posted second-quarter profit that topped analysts' estimates as sales outpaced discount rivals such as Wal-Mart Stores Inc.
Net income rose 29 per cent to $598-million, or $1.35 a share, from $463-million, or $1.05, a year earlier, the Issaquah, Washington-based company said today in a statement. The average of 25 analysts' projections compiled by Bloomberg was $1.18.
Costco, which focuses on selling large volumes of goods to its members at low prices, has outperformed Wal-Mart and Target Corp. recently. Sales at Costco stores open a year or more increased 8 per cent in the quarter, excluding changes in gasoline prices and foreign-currency exchange rates. In its most recent quarter, Wal-Mart reported a 1.5 per cent increase in U.S. same-store sales, while Target posted a 3.2 per cent gain.
Costco fell 0.1 per cent to $147.17 yesterday in New York. The shares have gained 3.8 per cent this year.
Sales in the quarter ended Feb. 15 rose 4.4 per cent to $27.5-billion. Revenue from membership fees advanced 5.8 per cent to $582-million.
The stronger dollar took a toll on international same-store sales, which fell 2 per cent when including the impact of currency fluctuations and gas-price deflation. They rose 8 per cent without those effects.