Early Costco FY results show growth, again

ISSAQUAH, WASH. —Costco isn’t due to report its official results for fiscal 2008 until Oct. 8, but the preliminary numbers it released this month show that it was another typical year of double-digit growth.

Preliminary net sales for the fiscal year ended Aug. 31, were $70.95 billion, up 12% from $63.09 billion in 2007. Total sales for August rose 12% to $5.41 billion and sales for the fourth quarter ended Aug. 31 were also up 12% to $22.60 billion from $20.09 billion in 2007.

Costco ended its year with a strong month of August that actually fell below analysts’ expectations. It reported a 9% increase in same-store sales for the month, slightly below the analysts’ consensus of 9.6%. When the price inflation of gas is excluded, same-store sales rose 6%.

Nevertheless, Costco ended its year with an 8% increase in same-store sales driven by a 15% jump in sales at its international stores. Same-store sales in the United States were up a respectable 6%.

Costco is still weeks away from reporting its fourth-quarter earnings, but they’re likely to be strong, despite the fact that the club operator has had to absorb some hefty price increases from vendors. In a July conference call, cfo Richard Galanti said, “We’re seeing our prices increase 5% to 10%, and even more than 10% in some cases. But in every case, we’re trying to hold the line as long as we can and be the last one to pass [price hikes] on.”

The company ended the fiscal year with 543 stores and said it plans to open eight or nine new stores before the end of 2008.