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Costco beats analysts’ expectations; Family Dollar reports profit
Costco Wholesale Corp. (Issaquah, Wash.) reports its fiscal fourth-quarter profit fell 6 percent, yet the results beat analysts' estimates. Revenue slipped 3 percent to $22.38 billion from $23.1 billion, but surpassed Wall Street’s $22.34 billion sales estimate. The company attributes the loss partly to the stronger dollar and increased employee benefit costs.
The warehouse club’s same-store sales declined 5 percent in the quarter, with U.S. seeing a 6 percent drop and international locations reporting a 3 percent drop-off. When the effect of the stronger dollar and lower gas prices are removed, those figures are in the positive with U.S. same-store sales up 1 percent and international sales rising 7 percent.
"We see a margin turnaround from a recovering sales trend in non-food categories and regional improvement from California," Morgan Stanley analyst Mark Wiltamuth told The Associated Press.
For the month of September, Costco reports sales up 1 percent, primarily on a 6 percent increase internationally that offset a 1 percent drop in U.S. sales. Costco operates 560 warehouses, including 407 in the U.S. and Puerto Rico, 77 in Canada, 32 in Mexico, 21 in the U.K., seven in Korea, six in Taiwan, nine in Japan, and one in Australia.
Meanwhile, Family Dollar Stores Inc. (Matthews, N.C.), reported a profit increase of 13 percent as retailers appealing to budget-conscious shoppers continued to do well. The discounter retailer’s sales in the quarter ended Aug. 29 rose 2.6 percent while comparable-store sales increased 1 percent. For fiscal 2010, the company expects net sales will increase 5 to 7 percent and same-store sales to grow 3 to 5 percent.
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