Lower prices in grocery and gasoline were cited by Costco as the key culprits in its less than spectacular fourth quarter results.
For the period ended August 28, sales were $35.73 billion, up 2% from the same quarter the previous year. Comparable store sales for the fourth quarter were negative 1% in the United States and flat company wide. Quarterly net income was $779 million, or $1.77 per diluted share, compared to $767 million, or $1.73 per diluted share, for the same quarter the previous year.
For the fiscal year, Costco sales were $116.07 billion, up 2% from sales of $113.67 billion in the prior fiscal year. Comparable store sales for the year were up 1% in the U.S. and flat across the company. Net income for the fiscal year was $2.35 billion, or $5.33 per diluted share, compared to $2.38 billion, or $5.37 per diluted share, last year.
While falling prices negatively impacted Costco’s quarterly results, company officials reported that sales in hardlines were up mid single-digits. Among the segments showing solid results included small electrics and home furnishings.
Costco operates 715 warehouses, including 501 in the United States and Puerto Rico, 91 in Canada, 36 in Mexico, 28 in the United Kingdom, 25 in Japan, 12 in Korea, 12 in Taiwan, eight in Australia and two in Spain. The company plans to open up to an additional nine new warehouses before the end of 2016.