On the Call: Richard Galanti, Costco CFO

AP News
Posted: Dec 10, 2009 3:36 PM

Consumer spending remains sluggish as the economy weighs on shoppers. That is changing the landscape for this holiday season. Retailers, more than ever, are trying to find the most precise amount of inventory at the right price to drive sales and not leave them with an excess of unsold items at the end of the year.

Costco Wholesale Corp. typically starts its holiday selling season early. Richard Galanti, the chief financial officer at the Issaquah, Wash.-based company discusses its approach on Thursday during a conference call with investors:

QUESTION: You brought in some seasonal items a little early, I think into mid-August rather than early September? Did that change the cadence of sales, did that give you early return, what did that allow you to do different holiday 2009 versus holiday 2008, if it did?

RESPONSE: Well, less markdowns. I think it gets back to what Jim (Senegal, CEO) talked about as being aggressive. And if you have great merchandise at great prices let's get them in there earlier and people see it here first and buy it here first. And we have the luxury in our model to do that. I view it as ... taking the offense and also giving us more time if we did need to sell through without markdowns.