0.15 dollar sits inside 6.75 dollars

Costco lifted net sales 11.2 per cent to 93.9 billion dollars in the 16-week quarter ended 30 August, from 84.4 billion dollars a year earlier. Diluted earnings were 6.75 dollars a share, up from 5.87 dollars. The release sets 0.15 dollar of that 6.75 dollars aside as a one-time tariff refund. The item is what remains after a partial reinvestment in member value.[1]

Membership fees rose to 1,850 million dollars from 1,724 million dollars. Cash at the end of the period was 20,207 million dollars. Cash from operations was 15,825 million dollars, and additions to property and equipment were 6,435 million dollars. Cash is accumulating and spending is rising too. The 0.15 dollar line marks the slice of profit the company labels non-recurring.[1]

Sales are 6.7 per cent once gasoline is out

Total comparable sales rose 9.4 per cent. Strip out gasoline prices and foreign exchange and the same measure is 6.7 per cent. The pump price and the currency enter the quarter's table, and the 6.7 per cent measure sits closer to merchandise sales. Operating income was 3,801 million dollars, against 3,341 million dollars a year earlier. Set beside the 11.2 per cent sales increase, part of the profit leans on the tariff line and on gasoline prices.[1]

1.6 points of H&M's margin are one-time

H&M's net sales from 1 June to 31 August were 57,189 million kronor, against 57,017 million kronor a year earlier, and the gain in local currencies was 1 per cent. The gross margin rose to 54.0 per cent and the operating margin to 10.6 per cent, from 52.9 per cent and 8.6 per cent. The company writes that about 1.6 percentage points of each margin is a one-time effect from tariffs and goods imports that had raised the cost of goods sold in earlier quarters. Operating profit rose to 6,037 million kronor from 4,914 million kronor.[2]

Costco shows the 0.15 dollar inside earnings per share, and H&M shows the 1.6 points inside the margin. Both are a slice of the customs bill that reversed this quarter. The store business may have contributed as well: Costco's membership fees rose to 1,850 million dollars, and H&M's sales in local currencies still rose 1 per cent. Both businesses would have reported a profit without the one-time line. Reading this quarter's profit step without the tariff item still leaves a smaller operation than the reported figure.[1], [2]