Costco CFO: Fingers Crossed Consumers Will Spend

NEW YORK/SAN FRANCISCO (Reuters) - Costco Wholesale Corp 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 August 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.