Costco Wholesale Corp. said Wednesday it is becoming “a little bit more open-minded” about data mining.
“There’s a lot of low-hanging fruit we haven’t [dealt with], and there are certainly more efforts in those areas by our marketing team," said Richard A. Galanti, EVP and CFO. "We don’t do a lot with it, but we’re doing a little more than we used to.
“Marketing has definitely been told to do new things, and when it has, the programs generally work. But we’re first and foremost focused on just constantly driving quality and value on the products and services we sell, and a lot of those other things take care of themselves.”
For the 16-week fourth quarter ended Aug. 30 net income at the Issaquah, Wash.-based company rose 10% to $767 million, while net sales — as previously announced — increased 0.7% to $35 billion and overall comparable sales, excluding gas price deflation and foreign exchange, rose 6%. For the fiscal year net income was up 15.5% to $2.4 billion — including a positive impact of $57 million from a tax benefit in connection with a second-quarter special cash dividend for participants in the company’s 401(k) plan — while net sales rose 3% to $113.7 billion and overall comps, excluding gas deflation and foreign exchange, increased 7%.
Kelly Bania, an analyst with BMO Capital Markets, New York, said she expects Costco to remain “highly relevant in a fast-changing consumer environment,” particularly in the area of organic foods, where sales exceeded $4 billion, with average prices that are 40% below prices at Whole Foods, she noted. John Heinbockel, managing director for Guggenheim Securities, New York, said he expects Costco to produce “among the strongest traffic growth in retail,” as long as consumables, specifically fresh food, “remain differentiated by quality” and new, value-added Kirkland-brand products continue to be introduced in both food and non-food categories.