FAST and COST both missed
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Costco profit up as same-store sales improve
By Nathalie Tadena
Costco Wholesale Corp.'s (NASDAQ:COST) fiscal fourth-quarter earnings increased 1.3% as the wholesale club reported same-store sales growth in both its domestic and international businesses.
However, results fell short of analysts' expectations. A shaky economy has encouraged shoppers in recent periods to make bulk purchases at Costco's warehouse clubs, which can be less expensive than other outlets. Costco also sells its gasoline for less than area pumps, which has contributed to higher traffic at its clubs. Costco, like many other retailers, has faced rising costs for merchandise, though these costs increased only slightly in the latest period.
For the quarter ended Sept. 1, Costco reported a profit of $617 million, or $1.40 a share, up from $609 million, or $1.39 a share, a year earlier. Total revenue edged up 0.8% to $32.49 billion.
Analysts polled by Thomson Reuters expected earnings of $1.46 a share and revenue of $32.82 billion.
Revenue from membership fees increased 3.2% to $716 million.
Operating margin was unchanged from a year earlier at 2.9%, while merchandise costs edged up 0.7%. Provision for income taxes slipped 3.2%.
Total same-store sales were up 5% for the period, excluding currency fluctuations. Same-store sales increased 5% in the U.S. and 7% internationally, excluding changes in foreign-exchange rates.
Costco, which currently operates 638 warehouses, said it plans to open up to an additional 11 new warehouses prior to the end of calendar year 2013.
Shares closed at $112.21 Tuesday and were mostly inactive premarket. Through the close, shares are up 14% since the start of the year.
Write to Nathalie Tadena at nathalie.tadena@wsj.com
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