UPDATE 2-Costco CFO: fingers crossed consumers will spend

* CFO says still remains cautious

* CEO says no plans to resume issuing financial guidance

* To ramp up store openings in next 5 yrs
(Adds store opening plans, analyst comments, byline)

By Martinne Geller and Nicole Maestri

NEW YORK/SAN FRANCISCO, Nov 11 (Reuters) - Costco Wholesale
Corp (COST.O) is hoping that consumers are becoming more
comfortable making purchases as the No. 1 U.S. warehouse club
operator heads into the year-end holiday shopping season.

"We still are cautious but are keeping our fingers crossed
that people are buying a little bit," said Chief Financial
Officer Richard Galanti on Wednesday.

He made the comments at the retailer's investor day, which
was held in its new store in Manhattan.

Costco's monthly same-store sales fell through much of this
year as shoppers shunned purchases of its discretionary
merchandise, like jewelry and clothes. Unlike a year ago, when
gasoline prices rose to record levels, Costco received no
recent sales boost from the price of gas.

But same-store sales returned to positive territory in
September and October, marking an improvement from August, when
same-store sales fell 2 percent. The retailer has also said it
is seeing demand return for products besides food, like
sporting goods, clothes and cameras.

Costco also said at the meeting that it plans to ramp up
store openings in the next five years. While the majority of
those new stores will be opened in the United States, it said
it sees potential to expand its store base in Japan, Taiwan,
Korea and Australia.

R.J. Hottovy, an analyst with Morningstar, said he was
pleased with what he heard at the meeting, and it reinforced
his view that Costco has a strong business model.

"In the downward economic cycle that we're in, I think the
value proposition that Costco provides, it really sells
itself," Hottovy said.

OPENING PLANS ACROSS THE GLOBE

Costco operated 559 warehouses as of Aug. 30, the end of
its fiscal year. That including 406 clubs in the United States
and Puerto Rico; 77 in Canada, 21 in the United Kingdom, seven
in Korea, six in Taiwan, nine in Japan, 32 in Mexico and one in
Australia.

It expects to open 15 to 20 stores this current 2010 fiscal
year, up to 20 stores in each of its fiscal years 2011 and
2012, and more than 25 in fiscal years 2013 and 2014.

In Japan, Taiwan and Korea, where business is performing
well, Costco said it has the capacity to operate 100 stores. In
Australia, where it recently opened its first location, it has
the capacity to operate roughly 20 stores, it said.

CEO Jim Sinegal said Costco does not plan to raise prices
to boost margins. Instead, he said Costco will be smarter about
the products it stocks on shelves to reduce costs -- like
making round jars square so that more can fit on a shelf or
reducing the size of packaging.

"We prefer to make our additional margin by being smarter,
by buying better and being more efficient in our business,"
Sinegal said.

He also said a reasonable goal for Costco's operating
profit margin would be about 3.5 percent. While that is slimmer
than the 4 percent margin he discussed during the boom years,
it is still fatter than some analysts have expected.

"That seems to be the big debate -- how high can operating
margins go for Costco," said Hottovy. "Generally speaking I
think 3.5 percent is higher than most people look at."

Even though Sinegal said he was not sure when Costco would
achieve that margin, Hottovy said he was encouraged that the
target set a new base for general profit expectations.

Sinegal also said the retailer has no plans to resume
issuing earnings forecasts. Costco stopped providing the
forecasts in the past year, saying the climate was too
volatile.

Sinegal said that issuing the forecasts is "a terrible
distraction for management."

Costco shares closed up 36 cents, or less than 1 percent,
at $60.40 on the Nasdaq on Wednesday.
(Writing by Nicole Maestri; Editing by Matthew Lewis, Bernard
Orr)