In general, Costco is selling more merchandise at lower prices. Costco said Tuesday that sales at stores open at least a year rose 9% in its fiscal second quarter, but the gains were heavily concentrated outside the U.S.
Its U.S. sales showing a 5% gain—bolstered by higher gasoline prices. Excluding gasoline, sales rose 2%, the company said. International sales, which account for about one-fifth of its revenue, jumped 26%, benefitting from a weaker U.S. dollar.
“I think the motivation is to get more nonfood and bigger ticket items” in stores, Chief Financial Officer Richard Galanti said in a conference call with analysts. “And bigger ticket means going from medium to a little bigger than medium but not all giant like it was during the gravy days,” Mr. Galanti said.
Costco posted a profit for the fiscal second quarter ended Feb. 14 of $299 million, or 67 cents a share, up from $239 million, or 55 cents a share, a year ago. The latest results included a $22 million pretax charge, equivalent to three cents a share, for a change in employee benefits.
Total revenue increased 11% to $18.74 billion, from $16.84 billion. Analysts surveyed by Thomson Reuters predicted a profit of 72 cents a share on $18.56 billion in revenue.
“While customer traffic has been positive, ticket [price] remains weak,” Citigroup retail analyst Deborah Weinswig said of Costco.
Costco currently operates 566 warehouses, including 413 in the U.S. and Puerto Rico, 77 in Canada, 21 in the United Kingdom, seven in Korea, six in Taiwan, nine in Japan, one in Australia and 32 in Mexico.