ISSAQUAH, Wash. -- Costco Wholesale Corp. here said last week fresh food continues to be "a great driver" for sales, "and we will continue to try new things to expand our fresh-foods business," Richard Galanti, chief financial officer, pointed out.
"We continue to see strength in meat, produce and deli," Galanti said. "Take a little item like rotisserie chicken, which has gone from a small item to a $100 million business for us, and we expect to see more of that [kind of growth] in the fresh-foods category."
Revenues, including net sales and membership fees, rose 14.2% to $10.9 billion for the 12-week quarter and 14.3% to $33 billion for the year to date. Comparable-store sales for both periods rose 11%. Net income jumped 29.2% to $198.7 million for the quarter and 21.6% to $585.6 million for the 36-week period.
Galanti said comparable sales rose 8% to 14% on the East and West coasts and 20% in some of the company's newer Midwest markets. In Southern California, where Costco enjoyed significant sales increases during the 20-week strike-lockout that ended there in early March, "we seem to be keeping the higher sales levels we achieved during the strike," he pointed out.
Costco has opened 13 new warehouses this year, including 11 in the U.S. and two in Canada, including three during the third quarter. According to Galanti, it expects to open seven more by the end of the fiscal year for a total of 20 -- three more than originally projected, he pointed out -- at a cost of $700 million.
The company intends to boost the number of annual openings to 25 in fiscal 2005, he added, including its second Costco Home Store, in Phoenix. Galanti said the number of new locations is expected to rise to 25 to 30 per year over the next four to five years.
Costco was scheduled to pay its first quarterly dividend last week -- 10 cents per share to holders of record May 10. On an annualized basis, the 40 cents paid out in dividends per year will amount to about $185 million annually, Galanti said.