Costco Maintains Growth Plans

The company opened eight stores in the first quarter (down from 10 in the first quarter of last year) and closed one store in Las Vegas that will be converted to a business center. More stores will open in the third and fourth quarters.

"So far, so good," said Richard Galanti, CFO. "We're pretty much in line with what we said in the beginning, [opening] 20 to 25 stores. We think there are some good real estate opportunities coming down in the next few months"

Expect more of these new stores to be located near malls. A store at Cumberland Mall in Atlanta, which attaches to the center only via a breezeway, has been very successful for the retailer.

"It's been a great location for us," Galanti said. "We will see more of that going forward."

International expansion also continues, with the company's first store in Australia opening in June or July. Costco also will push more into Asia, opening three stores annually rather than one, and perhaps as many as four or five year in the next few years, he said.

"We continue to look at other parts of Europe," as well, Galanti said. "But we're more likely to be in more malls than in Western Europe."

Net sales for the first quarter of fiscal 2009 were $16.04 billion, up 4% from the same quarter last year. Total company comp-store sales rose 1%, with US stores reporting a 3% rise and international stores a 7% decrease because of the strengthening dollar. In local currencies, comps rose 7.0%. Net income was $262.5 million, compared to $262 million for the prior-year quarter.

Costco operates 550 warehouses, including 403 in the US and Puerto Rico, 76 in Canada, 21 in the UK, six in Korea, five in Taiwan, eight in Japan and 31 in Mexico.