After opening 12 new warehouses in the first quarter, Costco followed that up with four in the second quarter of fiscal 2007, so that its total new stores for the full year will number about 29 or 30. The cost of the expansion program will be part of approximately $1.4 billion to $1.6 billion of expenditures during fiscal 2007 for real estate, construction, remodeling and equipment for the company's warehouse clubs and related operations.

The company disclosed its expansion plans during a conference call in which it reported that net income for the second quarter of fiscal 2007 was $249.5 million, or 54 cents per diluted share, compared to $296.2 million, or 62 cents per diluted share, during the second quarter of fiscal 2006. Net sales for the second quarter ended Feb. 18 increased to $14.80 billion from $13.79 billion during the second quarter of fiscal 2006. Comparable sales for the second quarter rose 5% in the US and 4% internationally.

Richard Galanti, the company's chief financial officer, said that the 5% increase in comp sales in the US consisted of an average increase of about 3% in the average size of transactions at the chain. Galanti noted that in addition to the new stores opened during the quarter, Costco added three new pharmacies to reach a total of 416. It also expanded the number of food courts, gas stations, hearing aid centers and other ancillary operations at its stores.

The net income slipped this year because costs outpaced sales growth, the company indicated. In addition, the latest quarter included certain one-time charges related to stock options. Without those one-time charges, the company would have posted net income of 66 cents per share.

Costco operates 506 warehouses. These include 373 locations in the US and Puerto Rico, 70 in Canada, 19 in the United Kingdom, five in Korea, four in Taiwan, five in Japan and 30 in Mexico.