Costco sales, profits up again in 2Q

Second quarter sales increased 8% to $24.3 billion and profits, aided by a sizable tax benefit, increased 39% to $547 million, or $1.24 a share.

The surge is profits for the 12 week quarterly period ended February 17 was driven by a $62 million, or 14 cent a share, tax benefit that resulted from the portion of a special dividend payment made in December to participants in the company’s 401(K) program. Costco authorized a one time special dividend of $7 a share last year to return cash to shareholders in advance of a 2013 tax hike on dividend income.

Without the tax benefit, Costco’s profits would have increased by a still respectable 23% to $485 million, or $1.10 a share. Solid growth in membership income contributed to the performance. Membership income increased 15% to $528 million for the quarter and was up 14.6% to slightly more than $1 billion for the first six months.

The company’s profits for the first half of its fiscal year reached $963 million, or $2.19 per share, compared to $714 million, or $1.62 per share last year

Net sales for the quarter increased 8% to $24.3 billion, from $22.5 billion last year and for the first half of the year sales increased 9% to $47.5 billion, from $43.7 billion last year.

As previously reported, total company same store sales advanced 5%, consisting of a 5% increase at domestic clubs and a 6% increase at international locations. Without the benefit of higher gas prices and favorable currency trends, U.S. comps were 5%, but the international comp was lower at 4%.

Costco ended the second quarter with 622 warehouses, consisting of 448 in the United States and Puerto Rico, 85 in Canada, 32 in Mexico, 23 in the United Kingdom, 13 in Japan, nine in Taiwan, nine in Korea and three in Australia. The company plans to open up to an additional fourteen new warehouses prior to the end of its fiscal year on September 1, 2013.