Costco Reports Financial Results

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Costco is looking to move to Thunder Bay, the hold up appears to be at City Hall
Costco is looking to move to Thunder Bay

Costco is looking to move to Thunder Bay, the hold up appears to be at City Hall
Costco is looking to move to Thunder Bay, the hold up appears to be at City Hall

Costco Steams Forward – Will Thunder Bay Join in?

ISSAQUAH, WA – Business News – There is a giant looking at Thunder Bay. It is not just the Sleeping Giant out in Thunder Bay. Costco Wholesale Corporation has been looking to open a location in the city.

Costco opened the company’s first location in 1976. From a converted airplane hangar on Morena Boulevard in San Diego this giant retail/wholesale member shopping giant started to grow. Originally the business model was only serving small businesses. However Costco soon discovered  that the company could achieve far greater buying clout by also serving a selected audience of non-business members.

The company says, ‘With that change, the growth of the warehouse club industry was off and running. In 1983, the first Costco warehouse location was opened in Seattle. Costco became the first company ever to grow from zero to $3 billion in sales in less than six years. When Costco and Price Club merged in 1993, the combined company, operating under the name PriceCostco, had 206 locations generating $16 billion in annual sales”.

Is it working? Costco announced today its operating results for the first quarter (twelve weeks) of fiscal 2014, ended November 24, 2013. Net sales for the quarter increased five percent, to $24.47 billion from $23.20 billion during the first quarter last year. Comparable sales for the first quarter of fiscal 2014 were as follows:

12 Weeks
U.S  3%
International 1%
Total Company 3%

Comparable sales for the twelve-week period, excluding negative impacts from gasoline price deflation and foreign exchange, were as follows:

12 Weeks
U.S. 4%
International 6%
Total Company 5%

Net income for the quarter was $425 million, or $.96 per diluted share, compared to $416 million, or $.95 per diluted share, last year.

Costco currently operates 648 warehouses, including 461 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 18 in Japan, 10 in Taiwan, nine in Korea and five in Australia. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.
A conference call to discuss these fiscal 2014 first quarter operating results is scheduled for 8:00AM PST (PT) on December 11, 2013, and is available via a webcast.

What Does a Costco Mean for a Community?

Mayor Keith Hobbs
Mayor Keith Hobbs

Thunder Bay has been reportedly in the sights of this retail giant. Sources tell NetNewsLedger.com that the hold up appears to be at City Hall. The company would bring good paying jobs to the city, and likely attract other retail giants to locate here along side the Costco.

Mayor Hobbs has long advocated for a Costco in Thunder Bay. The Mayor shares that there are thousands of Costco members in the city, but that to benefit from their memberships, they have to leave the city.

Sources tell NetNewsLedger that a Costco in Thunder Bay would likely bring in some of the other retail giants as well, increasing employment and boosting the tax revenue base for the city.

Open for Business?

Thunder Bay should be open for business. As noted during the forestry downturn, and the recent upheaval in the mining sector with Cliffs Natural Resources indefinite suspension of operations in the Ring of Fire, primary resources are a very volatile market.

Some might suggest that adding more ‘Big Box Stores’ to the local shopping mix will impact the local economy. Those people are right. Instead of thousands of packages heading to Ryden’s Border Store to be picked up by Thunder Bay residents, some of that money would stay here in the community.