After opening 12 new warehouses in the first quarter, Costcofollowed that up with four in the second quarter of fiscal 2007, sothat its total new stores for the full year will number about 29 or30. The cost of the expansion program will be part of approximately$1.4 billion to $1.6 billion of expenditures during fiscal 2007 forreal estate, construction, remodeling and equipment for thecompany's warehouse clubs and related operations.

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

Richard Galanti, the company's chief financial officer, saidthat the 5% increase in comp sales in the US consisted of anaverage increase of about 3% in the average size of transactions atthe chain. Galanti noted that in addition to the new stores openedduring the quarter, Costco added three new pharmacies to reach atotal of 416. It also expanded the number of food courts, gasstations, hearing aid centers and other ancillary operations at itsstores.