July 9, 2009 / 2:16 PM / 10 years ago

UPDATE 3-Costco June same-store sales fall 6 pct

* Hit by slide in demand non-food, discretionary items

* June total sales down 4 pct to $6.88 bln

* Demand for food items remains strong

* Traffic up 4.5 pct from last year (Recasts; adds stock activity)

July 9 (Reuters) - Costco Wholesale Corp (COST.O) on Thursday reported a 6 percent fall in June same-store sales, hit by a slide in demand for non-food and discretionary items.

Analysts, on average, were expecting its same-store sales at stores open at least a year in June to fall 6 percent, according to Thomson Reuters data.

Same-store sales at its U.S. locations decreased 6 percent, while international division sales fell 3 percent.

Excluding the negative impact from gasoline price deflation, it said U.S. comparable sales would have been down 1 percent, while on a local currency basis it said international same-store sales increased 8 percent.

Customers pay an annual fee to shop at Costco’s warehouses, which sell everything from laptop computers and bulk-sized packages of toilet paper to fresh fruit and frozen dumplings. Many of the clubs also operate gas stations.

“Comparable sales results for June in merchandizing are very similar for all of our categories compared to our mostly recently reported month — with stronger sales results in foods, sundries, fresh foods, and slightly softer sales results in the non-food, more discretionary categories,” a company executive said on a pre-recorded telephone message.

Specific categories of strength in food were in deli, candy, sundries and frozen foods, while demand for camera, navigation devices, cell phones and air conditioners was weak, said Bob Nelson, vice president financial planning and investor relations.

The softness in demand for air conditioners was due to cooler year-over-year weather, he added.

Meanwhile, television unit sales continue to be very strong, with unit sales up over 50 percent from last year, he said.

Nelson noted that the average transaction in June, including the negative effects of lower gasoline prices and a strong U.S. dollar, was down about 9.5 percent from last year.

However, he said traffic counts were pretty good in June, coming in higher year-over-year by about 4.5 percent.

Costco, the largest U.S. warehouse club, said total sales, in the five weeks ended July 5, fell 4 percent to $6.88 billion.

The company’s shares were down 13 cents at $45.89 Thursday morning on Nasdaq. (Reporting by Hezron Selvi and Amitha Rajan in Bangalore; editing by Simon Jessop, Anne Pallivathuckal)

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