Summary
Costco Wholesale Corporation's (COST) Q1 2007 filing for the period ending November 26, 2006, demonstrates continued robust growth. Net sales increased by 9.3% year-over-year, driven by a 4% increase in comparable warehouse sales and the opening of 29 new warehouses. Membership fees saw a significant 14.0% rise, reflecting strong member renewals, increased Executive Membership penetration, and a recent membership fee increase in the U.S. and Canada. Despite a slight 2 basis point decline in gross margin as a percentage of net sales, primarily due to the Executive Membership reward program, overall net income grew by 9.8% to $236.9 million, translating to $0.51 per diluted share, an increase from $0.45 in the prior year's quarter. The company also actively engaged in share repurchases, buying back 8.3 million shares for approximately $425 million during the quarter.
Key Highlights
- 1Net sales increased by 9.3% to $13.85 billion, compared to $12.67 billion in the prior year's comparable quarter.
- 2Membership fees grew by 14.0% to $299.3 million, indicating strong member loyalty and the positive impact of recent fee adjustments.
- 3Net income rose by 9.8% to $236.9 million, with diluted earnings per share increasing to $0.51 from $0.45 in the prior year's quarter.
- 4Comparable warehouse sales increased by 4%, showing consistent growth in existing store performance.
- 5The company repurchased approximately $425 million of its common stock in the first quarter of fiscal 2007.
- 6Operating income increased by 8.5% to $353.1 million.
- 7Total revenue grew by 9.4% to $14.15 billion.