COSTCO FRESH FOOD SALES STILL STRONG, CLIMB IN 2ND QUARTER

ISSAQUAH, Wash. -- Costco Wholesale Corp. here said fresh foods continue to be a strong contributor to overall results.

ichard Galanti, executive vice president and chief financial officer, told analysts during a conference call last week following release of the company's results for the second quarter and first half ended Feb. 17.

According to Galanti, fresh food sales rose 9% for the 12-week quarter, up slightly from the 8% increase in the first quarter; during the month of February, he added, fresh food sales were up 8%.

He also said pricing pressures from supermarkets and category killers lessened during the half, while price competition from direct competitors "has not strengthened and has probably lessened."

Overall, the company said net sales -- excluding membership fees and other revenues -- climbed 13% to $9.2 billion for the 12-week quarter and 12% to $17.5 billion for the half, and net income rose 9% to $192.6 million for the quarter and 5% to $322.2 million for the half.

Comparable sales increased 7% for the quarter and 6% for the 24-week period, with comps in the United States up 8% for the quarter and 7% for the year to date, while comps in stores outside the United States were up 2% for the quarter and were flat for the half.