Costco raises profits, membership fees

Reports Q4 results

ISSAQUAH, Wash. — Costco membership seems to defy current consumer trends as the warehouse club announced Wednesday that it would raise its annual membership fees as it reported increases in fourth-quarter sales and earnings.

The company announced that effective Nov. 1, it will increase annual membership fees by $5 for U.S. goldstar (individual), business, business add-on and Canada business members. With this increase, all U.S. and Canada goldstar, business and business add-on members will pay an annual fee of $55. Also effective Nov. 1, U.S. and Canada executive membership annual fees will increase from $100 to $110, and the maximum 2% reward associated with executive membership will increase from $500 to $750. The fee increases will impact a little over 22 million members, roughly half of which are executive members.

For the fourth quarter, Costco reported net sales were $27.6 billion, an increase of 17% from $23.6 billion in the 16-week fourth quarter of fiscal 2010 ended Aug. 29, 2010. This year's 16-week period included sales from the company's Mexico joint venture; otherwise, the increase would have been 14%, the company said.

Total U.S. same-store sales for the fourth quarter were up 10%. Excluding fuel, U.S. comps rose 6%. Internationally, same-store sales were up 19%, 10% excluding fuel. Total same-store sales rose 12%, 7% excluding fuel.

Net income for the fourth quarter of fiscal 2011 was $478 million, or $1.08 per diluted share, compared with $432 million, or 97 cents per diluted share, during the fourth quarter of fiscal 2010.

Costco currently operates 592 warehouses, including 429 in the United States and Puerto Rico, 82 in Canada, 32 in Mexico, 22 in the United Kingdom, nine in Japan, eight in Taiwan, seven in Korea, and three in Australia.

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