NEW YORK (TheStreet) -- Costco Wholesale (COST) third-quarter profit rose as the company continues to benefit from low gas prices, strong store sales and membership fees. The second-largest retailer in the U.S. behind Wal-Mart (WMT) and one of the largest fuel retailers in the country, Costco has benefited from lower fuel prices and improving store sales and membership fees. Management released results Wednesday, May 27, after the bell.
Last month, the company paid a special one-time dividend of $5 a share, or $2.2 billion in all. Costco has also ended its exclusive partnership with American Express (AXP), under which Costco only accepted AmEx cards, and reached a similar arrangement with Citigroup (C) under which the retailer now only accepts Visa (V) branded credit cards. It continues to accept Visa and MasterCard (MA) debit cards.
The company, which started in 1983 in Seattle, now has 673 membership warehouses around the world and boasts a loyal membership with a renewal rate of about 91% in the U.S. and Canada and about 87% worldwide as of 2014, according to a regulatory filing. Members can use their cards at any location around the world. Costco said sales at established stores, a key metric that looks at sales at stores opened for at least a year along with online sales on sites operating for more than a year, fell 1% from the year earlier.
In the U.S., sales at established stores rose 1%. Excluding negative impacts from gasoline price deflation and foreign exchange, comparable sales rose 6% for the 12-week period while up 5% at U.S. stores. Overall, Costco reported a profit of $516 million, or $1.17 a share, up from $473 million, or $1.07 a share, a year earlier. Revenue rose to $26.1 billion as net sales rose 1% and revenue from membership fees rose to $584 million. Merchandise costs were $22.7 billion.