California puts crimp in Costco in April

Slow traffic at its California stores proved a drag for Costco Wholesale Corp. in April.



The retailer reported flat same-store sales in April, below analysts’ estimates of a 1.2% increase.



Total sales in April rose 3% to $8.98 billion, helped by strength in Canada.



Excluding gasoline-price fluctuations and currency exchange rates, U.S. same-store sales rose 2%, below estimates for growth of 3.4%. Same-store sales in Canada increased 2% overall and 7% when excluding gas prices and currency.



Costco said the U.S. regions with the strongest results were the Midwest, Texas and Northwest. The weakest comp sale results in the U.S. were in California, where the traffic was slightly negative for the month. Excluding the California buildings, Costco’s U.S. traffic was up approximately 3%.



"Our California locations represent a little more than one-third of our total U.S. sales, and we believe the high penetration of gas stations at those buildings generated stronger traffic last year, resulting in tougher comparisons this year for the California business," stated Jeff Elliott, AVP financial planning and investor relations, Costco.