Wholesale club retailer Costco Wholesale Corp reported higher-than-expected quarterly profit and revenue on Thursday, helped by an increase in membership fees and an increase in sales, reports Reuters. And despite Amazon Inc's disruptive takeover of Whole Foods, Costco was able to grow comparable sales in the U.S. in September by 9 percent.
Q4 ’17: Key Takeaways:
Canada’s comp sales grew 4.4% in the past 53 weeks
The company’s membership fees, which accounted for about 72 percent of Costco's operating income in 2016, rose 13 percent to $943 million in the 17-week quarter ended Sept. 3.
Net income attributable to Costco rose to $919 million, or $2.08 per share, in the quarter, from $779 million, or $1.77 per share, a year earlier.
Total revenue on the quarter rose 15.7 percent to $42.30 billion
Comparable sales for the 17-week fourth quarter, the 53-week fiscal year, and the 5-week September retail sales month were as follows:
17 Weeks 53 Weeks Sept. 5 Weeks
U.S. 6.5 % 4.4 % 9.0 %
Canada 4.9 % 4.7 % 9.4 %
Other International 5.6 % 2.1 % 8.2 %
Total Company 6.1 % 4.1 % 8.9 %
E-commerce 21 % 13 % 30 %
During a Q4 conference call, Richard Galanti, CFO and executive vice president, stated Costco is planning to open 25 net new warehouses in 2018 with about one third in international locations.
Galanti addressed investor questions about ecommerce delivery options noting that the company "has delivery options for our members and if someone chooses that route we'll be able to deliver and generate sales from it," also noting that its "brick and mortar business is as strong as it's ever been and trending in the right direction."
He noted that ecommerce activity has accelerated on the non-food side, such as appliances and apparel and is adding sundries and dry food items to ecommerce offerings.
While recognizing the growth of ecommerce, he also stated Coscto is only "scratching the surface of figuring out how to get you into our stores more often....no matter who delivers, there are people that want to go out and touch their fresh food and pick it up themselves."