Plans call for opening 35 "consolidated" stores and two in Mexico, as well as two relocations. An original estimate of opening 20 new stores between Sept. 3 and the end of calendar year 2006 has been slightly adjusted.
"That will be about 18, or maybe 16 or 17 stores, due to construction or zoning issues," said Richard Galanti, executive vp and CFO. Plans call for even more openings in 2008, perhaps up to 40 or 42 new units.
In fiscal 2006, Costco opened a net of 27 new stores, 20 in the United States, three in Canada, two each in the United Kingdom and Mexico. The company operates 488 warehouses, including 359 in the United States and Puerto Rico, 68 in Canada, 18 in the United Kingdom, five in Korea, four in Taiwan, five in Japan and 29 in Mexico.
Costco also plans to expand the test of its concierge service, now only in Southern California, to the rest of the state by year-end. Shoppers can now call an 800 number to get advice about merchandise, "perhaps better than they receive from the manufacturers' 800 number," Galanti said.
"We're taking some of the burden off the manufacturers," said CEO Jim Sinegal.
The growth comes after Costco announced that it would begin an internal review of its stock option grant practices during the years 1996 through 2005. A special committee of independent directors engaged independent counsel and experts to review all equity grants, and in September reported no evidence of fraud. The results have been made available to the Securities and Exchange Commission, Galanti said.
Net sales for the 17-week fourth quarter increased 19% to $19.50 billion compared with the 16-week fourth quarter last year. Comparable sales during rose 8% over the comparable 17-week period in 2005. Earnings for the quarter was $355.6 million, compared to $354.7 million, in fiscal 2005.
Net sales for the 53-week fiscal 2006 were $58.96 billion, up 14% from the 52-week 2005 fiscal year. Comp sales increased 8% over the comparable 53-week period ending in 2005. Fiscal 2006 earnings were $1.1 billion, up from from $1.06 billion the previous year.
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