Thursday, Costco Wholesale Corp. (COST) posted a 5% decline in its March comparable-store sales, hurt by gasoline deflation and foreign exchange.

Retailers have been grappling with the pins and needles of the surly economic climate, through one of the worst holiday shopping seasons in recent history, on eroding consumer confidence. Moreover, the company is facing competition from Sam's Club that has ramped up competition to entice penny-pinching consumers who opt to trade down for less pricey products.

The Issaquah, Washington, D.C.-based Costco's net sales for five weeks ended April 5, 2009 fell 3% to $6.39 billion from $6.57 billion reported in the corresponding period of the previous year.

The latest period results encompassed 35 days of sales compared to 34 last year, reflecting the timing of Easter. This calendar shift positively influenced current year's total and comparable sales by about 1% - 2%.

March comparable store sales dropped 2% in the U.S. and 13% overseas. Excluding the negative impacts from gasoline deflation and foreign exchange, primarily in Canada, United Kingdom and Korea, sales at stores open at least a year improved 3% in the U.S. and advanced 9% overseas.

Consumer Price Index, on a seasonally adjusted basis, increased 0.4% in February after rising 0.3% in January, according to the latest data issued by the department of labor. The index for all items less food and energy rose 0.2% in February. U.S. gasoline prices averaged $2.037 per gallon during the week ended April 6, lower than the previous year.

Among other playesr in the field, Stage Stores Inc. (SSI) reported a 15% downfall in its comparable store sales for the month of March. Total sales for the month declined 11.5% to $124.9 million from $141.1 million in the prior year period.

For the first thirty-one weeks period ended April 5, 2009, Costco's net sales were $41.47 billion, an increase from $41.34 billion reported during the same period of last year. Year-to-date comparable sales fell 10% overseas.

For the preceding month, the warehouse retailer had reported net sales of $5.06 billion, down 1% from $5.13 billion in the prior year. Comparable sales for the month of February declined 3%, while comparable sales excluding the negative impacts from gasoline deflation and foreign exchange rose 5%. In U.S., comparable sales were flat, while increased 4% excluding gas deflation. International comparable sales for the month fell 15%, but rose 6% excluding foreign exchange.

Currently, Costco operates 555 warehouses, including 408 in the United States and Puerto Rico, 76 in Canada, 21 in the United Kingdom, six in Korea, five in Taiwan, eight in Japan and 31 in Mexico.

Costco closed Wednesday's trading session at $47.70. In the past 52-weeks, the stock has been trading between $38.17 and $75.23.

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