ISSAQUAH, Wash. - Costco Wholesale Corp.'s profit climbed 17 percent in its first fiscal quarter on increased revenue from membership fees and strong results overseas.
The nation's biggest wholesale club operator has been one of the stronger retailers during the weak economy, as shoppers have increasingly turned to it for deals on everyday items such as food and health and beauty products. Recently, the company has seen shoppers pick up more small extras such as housewares.
Costco reported on Wednesday that its net income rose to $312 million, or 71 cents per share, for the period ended Nov. 21, up from $266 million, or 60 cents per share, a year earlier.
The results topped analysts' average forecast of 69 cents per share, according to a survey by Thomson Reuters. The estimates normally exclude one-time items.
Costco's stock rose 26 cents to $69.90 in pre-market trading on Wednesday.
Revenue rose 11 percent to $19.24 billion from $17.3 billion, beating Wall Street's expectation for revenue of $18.81 billion.
The Issaquah, Wash.-based company said sales at clubs open at least a year climbed 7 percent, with international results up 14 percent and U.S. results rising 5 percent.
This metric is a key indicator of a warehouse club operator's health because it excludes results from stores opened or closed over the past year.
Removing the impact of gasoline sales and strengthening foreign currencies, sales at clubs open at least a year increased 5 percent.
The same figure climbed 10 percent internationally and 4 percent in the U.S.
Brian Sozzi of Wall Street Strategies Inc. said Costco benefited from an improved consumer spending environment in the U.S., which led to better sales of bulk items such as fresh food and discretionary items like clothing.
The company also appeared to get off to a solid start for the holiday season.
"By all accounts, Black Friday and the weekend were strong for Costco as consumers bought doorbusters and again, stocked the pantry for holiday festivities," Sozzi wrote in a note to clients.
Costco does not issue quarterly earnings guidance. The company currently has 582 warehouses, with 425 in the U.S. and Puerto Rico, 80 in Canada, 22 in the U.K., seven in Korea, six in Taiwan, nine in Japan, one in Australia and 32 in Mexico.