Costco second-quarter net income up 13 percent as sales improve

A shopper looks at a copy of TurboTax on sale at Costco in Mountain View, Calif.

ISSAQUAH, Wash. — Costco Wholesale Corp.'s fiscal second-quarter profit rose 13 percent as sales improved and it made more money from membership fees. The wholesale club operator's performance topped Wall Street's expectations. Its shares rose 2 percent in premarket trading.

During the economic downturn many consumers have looked to stretch their money further by shopping at wholesale clubs, where they can buy items in bulk for prices typically cheaper than at their local grocery store.

Costco reported Wednesday that its net income rose to $394 million, or 90 cents per share, for the period ended Feb. 12, up from $348 million, or 79 cents per share, a year ago.

This beat the 88 cents per share that analysts polled by FactSet predicted.

Revenue increased 10 percent to $22.97 billion from $20.88 billion, beating Wall Street's $22.7 billion forecast.

Costco said that revenue from membership fees rose to $459 million from $426 million.

Revenue at stores open at least a year climbed 8 percent. The figure also rose 8 percent in the U.S. and overseas during the quarter. Excluding higher gas prices and the negative impact of foreign currencies, revenue at stores open at least a year increased 7 percent.

This metric is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

Its shares rose $1.73, or 2 percent, to $87 in premarket trading.

Results for the month of February were the same as the quarter, with revenue at stores open at least a year up 8 percent. The U.S. and overseas also each posted 8 percent increases for the four week period.

Taking out increasing gas prices and foreign currencies effect, revenue at stores open at least a year climbed 7 percent.

Costco, based in Issaquah, Wash., currently runs 600 warehouses. This includes 433 in the U.S. and Puerto Rico, 82 in Canada, 32 in Mexico, 22 in the U.K., 13 in Japan, eight in Taiwan, seven in Korea and three in Australia.