Costco sales down an in-line 6 percent

Thu Jul 9, 2009 5:30am EDT

A view of the Costco store in Superior, Colorado June 7, 2007. REUTERS/Rick Wilking

A view of the Costco store in Superior, Colorado June 7, 2007.

Credit: Reuters/Rick Wilking

(Reuters) - Costco Wholesale Corp on Thursday reported an in-line 6 percent fall in sales, hit by a slide in demand during the recession for higher ticket items such as cameras and cell phones.

Analysts, on average, were expecting its same-store sales at stores open at least a year in June to fall 6 percent, according to Thomson Reuters data.

Same-store sales at its U.S. locations decreased 6 percent, while international division sales fell 3 percent.

Excluding the negative impact from gasoline price deflation, it said U.S. comparable sales would have been down 1 percent, while on a local currency basis it said international same-store sales increased 8 percent.

Customers pay an annual fee to shop at Costco's warehouses, which sell everything from laptop computers and bulk-sized packages of toilet paper to fresh fruit and frozen dumplings. Many of the clubs also operate gas stations.

"Comparable sales results for June in merchandizing are very similar for all of our categories compared to our mostly recently reported month - with stronger sales results in foods, sundries, fresh foods, and slightly softer sales results in the non-food more discretionary categories," Bob Nelson, Vice President Financial Planning & Investor Relations, said in a pre-recorded telephone message.

Specific categories of strength in food were in deli, candy, sundries and frozen foods, while demand for camera, navigation devices, cell phones, and air conditioners was weak, Nelson said.

The softness in demand for air conditioners was due to cooler year-over-year weather, he added.

Meanwhile, TV units sales continue to be very strong, with unit sales up over 50 percent from last year, he said.

Nelson noted that the average transaction in June, including the negative effects of lower gasoline prices and a strong U.S. dollar, was down about 9.5 percent from last year.

However, he said that traffic counts were pretty good in June, coming in higher year-over-year by about 4.5 percent.

Costco, the largest U.S. warehouse club, said total sales, in the five weeks ended July 5, fell four percent to $6.88 billion.

Shares of the company, which are down 6.5 percent in the last month, closed at $46.02 on Wednesday on the Nasdaq.

(Reporting by Hezron Selvi in Bangalore; editing by Simon Jessop)

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