Costco Cites Strength In Sales of Perishables

ISSAQUAH, Wash. — Sales in the food-sundries and fresh categories at Costco Wholesale Corp. here led all other product groups during the company's second fiscal quarter, which ended Feb. 17, Richard Galanti, executive vice president and chief financial officer, told analysts last week.

Produce had the strongest comparable sales, followed by deli, he said during a conference call to discuss financial results.

Galanti also said tobacco, which accounts for about 10% of volume in the food and sundries category, has been a drag on comps since Costco's decision to curtail tobacco sales at about 100 locations.

The weak economy is impacting meat sales, he added. “Even in a strong category like meat, which accounts for 6% of sales, we've seen a little bit of mix shift over the last few months, from beef to things like chicken — not so much a discernible amount as a slight shift.”

For the 12-week quarter, net income rose 31.4% to $327.9 million, with net sales, excluding membership fees, increasing 12.2% to $16.6 billion and comps, excluding gas, up 7%; for the half, net income climbed 21.3% to $589.8 million, with sales up 12% to $32.1 billion and comps, excluding gas, rising 7%.