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Gas Prices Boost Costco's Sales

ISSAQUAH, Wash. -- Costco Wholesale Corp.'s July same-store sales -- sales at stores open at least a year -- increased 9 percent over July 2003. The consensus estimate of analysts polled by Reuters was an increase of 7.9 percent.

The Issaquah-based warehouse retailer and operator of 200 fuel sites said net sales for the four weeks ended Aug. 1 were $3.72 billion, an increase of 12 percent over the same period a year ago.

Costco benefited from gasoline prices that were 40 cents per gallon higher this year than last, and by weakness in the U.S. dollar -- especially relative to the Canadian dollar -- compared to a year ago, said Dan Geiman, an analyst with McAdams Wright Ragen Inc.

The company said an accounting change in place this year negatively affected reported sales. Had the same accounting method been used a year ago, same-store sales would have been up 10 percent and net sales would have been up 13 percent, Costco said.

The company's average transaction size was up 6 percent, while traffic at Costco's 438 warehouses was up 3 percent, Costco said.
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