Costco profit up on higher members fee

 
City A.M. Reporter
COSTCO Wholesale posted a higher-than-expected quarterly profit yesterday after the US warehouse retailer raised membership fees.

Costco, which has millions of members who pay annual fees to shop at its giant stores, earned $609m, or $1.39 per share in the fiscal fourth quarter ended 2 September, compared with $478m, or $1.08 per share, a year earlier.

Membership fee revenue rose 18 per cent to $694m, due in part a 10 per cent fee increase for most US and Canadian members that went into effect starting in November 2011.

Strength in membership fee revenue should continue due to the increase in charges, solid renewal rates, more sign-ups due to new club openings, and a continued shift to higher-priced executive memberships, Janney Capital Markets analyst David Strasser said.

The company previously reported that sales in the fourth quarter rose 14 per cent to $31.52bn.

Same-store sales rose five per cent and were up six per cent excluding the impact of fluctuations in gasoline prices and foreign currency exchange rates.