Richard Galanti, Costco CFO, said that the chain plans to openat least 35 units next year and possibly 40, following a fiscal2006 of 25 new units and 16 new stores in 2005. The increase in newstores each year follows the previously announced Costco strategyof ramping up its expansion plans.

Galanti noted that since the first part of the company's fiscalyear falls during the end of this calendar year, about half of thefiscal 2007 openings—our about 21 new stores—will occur during thelatter part of this year. Although one reason for yesterday'sconference call was to discuss lowered earning expectations,Galanti commented that Costco's expansion plans are still on track."It's a little tough right now, but that doesn't change our outlooklong-term, and it doesn't change our expansion plans," the CostcoCFO said.

Galanti described a Costco fiscal year thus far in which thecompany, which will report quarterly and year-end earnings inOctober, has recorded an up-and-down performance in terms of sales,operating margins and other financial results. For the four weeksthat ended Aug. 27, for example, the company's sales rose 11% to$4.55 billion. Comparable sales for the period rose 5%.