Third-quarter profits for Costco Wholesale Corp. topped analyst expectations as margins at the warehouse-club chain improved for the first time in more than 12 months.
According to the company’s financial report net income for Q3 rose to $386 million (88 cents per share) up from 73 cents per share and $324 million during the same period 2011. Excluding several items the company’s shared were up to 89 cents per share, beating analysts projections of 87 cents.
The company can thank part of its increase in net income on new services such as pharmacies and vision centers. CEO Craig Jelinek has also pushed hard for lower prices on everything from baked good and gasoline to everyday best sellers.
The company also announced that in-store gross margin widened to 10.55 percent from 10.51 percent, the first year-over-year gain witnessed for the company in the last five quarters. In-store gross margin examines the stores sales after subtracting the cost of goods sold.
Also increasing by 5 percent were same-store sales, that number excluded changes in gas prices and currency rates. Costco officials also announced a gain of 8.2 percent in net sales, increase sales to $21.8 billion. The company also announced a 9.2 percent increase in membership fee totals to $475 million.
While many same-store and company wide numbers beat analysts expectations the company’s same-store increase of 5% was actually 2% lower than the 7 percent gain seen in the last two quarters. It is that final reporting metric that has some analysts worried that declining traffic at the gas pump and reduced foot traffic will cause sales to slow throughout the remainder of 2012.