×

Costco's May Same-Store Sales Rise 9%

Costco Wholesale, the largest U.S. warehouse club, reported a better-than-expected 9 percent rise in sales at stores open at least a year in May, helped by higher gasoline prices, food inflation and strength in foreign currency.

Costco
Costco

Meanwhile, the company, in a recorded conference call, said May same-store sales rose by a "soft 9" percent, which would be slightly more than 8.5 percent.

Sales were hurt by weak tobacco sales and "cannibalization" of sales from other Costco stores, the company said.

Analysts, on average, were expecting the company's same-store sales to rise 6.9 percent, according to Thomson Reuters data.

Same-store sales at its U.S. locations increased 7 percent, while international division sales rose 15 percent.

Excluding gasoline price inflation, it said U.S. comparable sales were up 5 percent, while on a local currency basis, it said international same-store sales increased 8 percent.

Foreign exchange rates, primarily in Canada, positively impacted international comparable sales results, Costco said.

Customers pay an annual fee to shop at Costco's warehouse locations, which sell everything from digital cameras and watches to bulk-sized packages of toilet paper and soda.

The clubs also sell gasoline, a lure to shoppers looking to fill their tanks with cheap fuel.

Costco said net sales in the four weeks ended June 1 rose 12 percent to $5.77 billion.

The company said it plans to open an additional seven to eight new warehouses, including the relocation of two warehouses to larger and better-located facilities, prior to the end of its 2008 fiscal year on Aug. 31.

Shares of Costco closed at $70.81 Wednesday on Nasdaq.