Costco First Quarter for 2017 Sees Store Sales Spike

Costco First Quarter for 2017 Sees Store Sales Spike

ISSAQUAH, WA - After three consecutive quarters showing an uphill battle for Costco, the retailer seems to be starting off its fiscal 2017 on the right foot. Same-store sales grew, more locations are planned, and stock was up at yesterday’s close upon the release of its first quarter report.

Richard Galanti, CFO, Costco“Citi Visa had a very positive impact on practices and our bottom line,” said CFO Richard Galanti during an earnings call, naming increased member value and sales, lower merchant fees, and 87% activated accounts of the 7.5 million transferred from American Express.

As we reported previously, the transition was a tumultuous one back in June, but it seems those wrinkles are now smoothing out.

“There was a lot of effort, and as you know, there were a few operational glitches during the first few weeks after the cutover. We're now past that, and more importantly, the new card is fantastic for our members,” Galanti said.

Photo Credit: Google Finance

Additional highlights for the quarter, ended November 20, 2016, included:

  • Net sales for the first quarter were $27.47 billion, an increase of three percent, from $26.63 billion during the first quarter last year.
  • Net income for the quarter was $545 million, or $1.24 per diluted share, compared to $480 million, or $1.09 per diluted share, last year.
  • Total operation of 723 warehouses, including 506 in the United States and Puerto Rico, 94 in Canada, and 36 in Mexico.

Galanti added that, in terms of expansion, Costco is planning on opening 31 new locations this year, two more than last year and a total increase of about 4.5% in square footage.

Of those new locations, 16 will be in the U.S. and 8 in Canada, with Costco opening its very first operations in both Iceland and France as it looks to grow itself globally.

Costco Storefront

Gross margin, including both food and fresh offerings, was also reported as being higher year over year by 17 basis points in the first quarter.

With more growth, and more offerings planned as it moves into its next quarter of fiscal 2017, AndNowUKnow will continue to report on key moves made by Costco and other retail operators in the industry.