Costco brings back Coca-Cola, reports Q1 sales are up

Warehouse retailer Costco announced positive first-quarter operating results for fiscal 2010, citing improvements in sales ending Nov. 22. Costco CFO Richard Galanti announced during a Dec. 10 webcast that sales for the first quarter of fiscal 2010 increased 6 percent to $16.92 billion from $16.04 billion during the first quarter of fiscal 2009. Net income for the first quarter of fiscal 2010 was $266 million, or $.60 per diluted share, compared to $263 million, or $.60 per diluted share, during the first quarter of fiscal 2009. Sales in non-perishable items recovered somewhat from declines in 2009, said Galanti, while the recession fueled higher sales volumes of perishable items. We've got our fingers crossed," he said. "Going into Christmas we feel pretty darn good." According to a Costco press release, overall volatility in strong foreign currencies relative to the U.S. dollar and deflation in the selling price of gasoline had offsetting impacts on comparable sales. Excluding these two factors, comparable sales grew 2 percent at U.S. stores and 8 percent abroad. Galanti also announced Costco had ended a well-publicized pricing dispute with soft-drinks giant Coca-Cola and that their products would return to shelves Dec. 14. Costco stopped restocking their drinks last month after posting a message on their Web site, explaining that "Coca-Cola has not provided Costco with competitive pricing so that we may pass along the value our members deserve.” Costco currently operates 566 warehouses, including 413 in the United States 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. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com and at www.costco.ca in Canada.

Contact Issaquah Reporter Staff Kendall Watson at kwatson@issaquah-reporter.com or (425) 391-0363, ext. 5052.

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