Warehouse club Costco reports profit drop, but tops expectations
The warehouse club operator earned $374 million, or 85 cents per share, for the quarter ended Aug. 30. That's down from $398 million, or 90 cents per share, a year earlier.Still, the performance was enough to top the 77 cents-per-share forecast of analysts polled by Thomson Reuters. Analysts' estimates generally exclude one-time items.
Revenue slipped 3 percent to $22.38 billion from $23.1 billion, but surpassed Wall Street's $22.34 billion sales estimate.
Sales at stores open at least a year dropped 5 percent in the quarter, with a 6 percent decline in the U.S. and a 3 percent dropoff internationally. Removing the effect of the stronger dollar and lower gas prices, sales at stores open at least a year edged up 1 percent.
These figures are considered a key indicator of a retailer's performance because they measure growth at existing stores, rather than newly opened ones.
Issaquah-based Costco has managed to pull in budget-conscious shoppers during the recession with deals on food and everyday items but has been hurt by a pullback in spending on big-ticket items like jewelry and furniture.
For the year, net income slipped 15 percent to $1.09 billion, or $2.47 per share, compared with $1.28 billion, or $2.89 per share.
Annual sales dipped 2 percent to $71.42 billion from $72.48 billion.
Costco currently runs 560 warehouses, including 407 in the U.S. and Puerto Rico, 77 in Canada, 32 in Mexico, 21 in the U.K., seven in Korea, six in Taiwan, nine in Japan, and one in Australia.