Costco profit jumps 17% in first quarter, but misses expectations

Costco Wholesale Corp. COST, +0.50% reported its profit rose 17% in the November quarter, driven by strong growth in same-store sales and membership fees.

The results, however, missed analysts’ expectations.

Costco, which sells groceries and other items in bulk, has been a standout of late among retailers, and it is one of the largest fuel retailers in the U.S. Lower gasoline prices are thought to actually help the company’s results because its throughput is so high and it can quickly capture the benefit of falling prices on the gasoline it buys. Meanwhile, cheaper fuel prices also leave consumers with more disposable income to buy goods at its warehouses.

Costco said Wednesday that same-store sales rose 7% in its first quarter ended Nov. 23, excluding negative impacts from gasoline price deflation and foreign exchange. In the U.S., that metric increased 7%.

In all, the company said its profit for the quarter rose to $ 496 million, or $ 1.12 a share, from year-earlier earnings of $ 425 million, or 96 cents a share.

Revenue improved 7% to $ 26.87 billion.

Analysts had expected a profit of $ 1.52 a share and revenue of $ 26.92 billion, according to Thomson Reuters.

Costco’s revenue from membership fees increased 6% to $ 582 million, while its merchandise costs rose 7% to $ 23.39 billion.

Write to Angela Chen at angela.chen@wsj.com

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