Costco’s third quarter revenue increased by 7.1% to $25.8bn, with comparable store sales (ex-fuel and currency impacts) up 6%. Net income attributable to Costco increased by 3.1% to $473m.
Food categories deliver solid performance
These results reveal an improving performance versus the previous quarter, although they continue to be negatively impacted by exchange rate movements. Food categories continued to perform strongly, including frozen food, confectionery and meat, while sales of consumer electronics were down, reflecting recent trends.
Driving expansion in international markets
Costco is pushing ahead with a stronger store opening program this year. Four stores were opened in the quarter, bringing the year to date total to 20. Since the end of the quarter, the retailer opened its first location in Spain, marking the start of a stronger presence in Europe. This month it opens its sixth unit in Australia, a very successful market for the retailer, although it continues to experience some degree of cannibalisation in the market. Strongest sales were recorded in South Korea, Taiwan and Canada, with sales up 8% to 10%.
Online sales up 15%
Sales though Costco online were up 15% versus the previous year. The retailer continues to benefit from improvements that it has made to its online site, including technical and customer experience enhancements. New ranges have been added, including clothing and health and beauty, while products are now being shipped from an additional distribution centre to help shorten delivery times. Recently its test with Google Shopping Express in the San Francisco area has expanded to Los Angeles and New York, suggesting that the retailer is seeing some benefits from the partnership.