Tags: costco | profit | sales | warehouse club

Higher Operating Expenses Pinch Costco Profit

Wednesday, 11 Dec 2013 09:44 AM

Costco Wholesale Corp. reported a first-quarter profit and sales that fell short of analysts' estimates, hurt by a rise in operating expenses.

Shares of the warehouse club operator, which sells everything from carrots to coffins at its cavernous stores, fell as much as 3 percent before the bell on Wednesday.

"While Costco has generally been prudent in controlling costs, Q1 selling, general and administrative (expense) was higher than we expected," Cowen and Co analyst Faye Landes wrote in a note.

Operating expenses rose 5.5 percent to $24.3 million. Selling, general and administrative expenses rose 7.2 percent.

Profit rose to $425 million, or 96 cents per share, in the first quarter ended Nov. 24 from $416 million, or 95 cents per share, a year earlier.

Analysts on average had expected the company to earn $1.02 per share, according to Thomson Reuters I/B/E/S.

Sales rose 5 percent to $24.47 billion, but missed the average analyst estimate of $25.35 billion. The company announced quarterly sales last week.

Sales at stores open at least a year rose 3 percent, including the impact of lower gasoline prices and a stronger dollar. Analysts on average were expecting same-store sales to rise 3.54 percent.

Excluding fuel and forex, same-store sales rose 5 percent.

Rival Wal-Mart Stores Inc reported a third-straight quarterly decline in U.S. same-store sales last month and forecast a lower-than-expected profit for the holiday quarter.

Costco, whose members pay up to $110 per year to shop at its big stores and website, operates 648 warehouses, including 461 in the United States and Puerto Rico.

It also has stores in Canada, Mexico, the United Kingdom, Australia, Japan and other Asian countries.

Shares of the Issaquah, Washington-based company were down 1.4 percent at $118.25 before the bell.

© 2017 Thomson/Reuters. All rights reserved.

 
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Costco Wholesale Corp. reported a first-quarter profit and sales that fell short of analysts' estimates, hurt by a rise inoperating expenses.
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2013-44-11
Wednesday, 11 Dec 2013 09:44 AM
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