KIRKLAND, Wash. -- Price/ Costco here said net income fell 10% to $62.3 million in the second quarter ended Feb. 13.
comparable-warehouse sales were down 3%.
Price/Costco's second-quarter figures reflect a $2.5 million pretax charge, or 1 cent per fully diluted share after taxes, for insurance deductibles resulting from the Los Angeles earthquake early this year. Six warehouses suffered structural or merchandise damage in the earthquake.
Last year's second-quarter results included a $6.7 million pretax gain, or 2 cents per share, from nonclub property sales. Results for the first half of fiscal 1994 include a $120 million pretax charge, or 36 cents per share after taxes, related to the merging of Price Co. and Costco Wholesale Corp. last October. Without the restructuring charge, net income would have totaled $109.3 million, or 49 cents per fully diluted share.
Second-quarter results met Wall Street's expectations.
"It's easy to lose control of your business during the merging process," said Michael Exstein, a securities analyst with Kidder Peabody, New York. "And there's no sign of that in these numbers."
Exstein said Price/Costco's stock has been unusually active in recent weeks because investors anticipate improvements to the company's purchasing, sales and distributional systems.
Price/Costco opened 22 warehouses during the first half of fiscal 1994, including seven in Canada. The company expects to add seven to 10 warehouses in the United States and Canada, two units in Mexico and one unit in the United Kingdom during the second half of the year.