Costco Q3 Profit Rises On Higher Comps, But Misses View

(RTTNews) - Membership warehouses operator Costco Wholesale Corp. (COST) reported Thursday higher profit in its third quarter with increased net sales and comparable sales. Earnings per share, however, missed analysts' estimates, while top line beat view.

For the third quarter, net income attributable to the company increased to $473 million or $1.07 per share from $459 million or $1.04 per share a year ago.

On average, 25 analysts polled by Thomson Reuters expected the company to report profit per share of $1.09 for the quarter. Analysts' estimates typically exclude special items.

Operating income for the quarter was $737 million, higher than last year's $722 million.

Total revenue increased to $25.79 billion from $24.08 billion last year. Analysts expected revenue of $25.76 billion for the quarter.

Net sales grew 7 percent to $25.23 billion from $23.55 billion in the previous year. Membership fees were $561 million, higher than $531 million a year earlier.

Comparable sales were up 4 percent in the quarter with a 5 percent increase in U.S. sales and a 3 percent growth in international region. Excluding negative impacts from gasoline price deflation and foreign exchange, comparable sales increased 6 percent with a 6 percent increase in U.S. and an 8 percent jump in international region. For the first thirty-six weeks, attributable net income was $1.36 billion or $3.07 per share, compared to $1.42 billion or $3.23 per share last year. Net sales increased 6 percent to $75.46 billion from $71.10 billion last year.

Comparable sales increased 3 percent with a 4 percent increase in U.S. sales and a 1 percent growth in international region. Excluding negative impacts from gasoline price deflation and foreign exchange, comparable sales increased 5 percent.

Costco currently operates 655 warehouses, including 464 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, and 19 in Japan, among others.

The company said it plans to open up to an additional eight new warehouses prior to the end of its fiscal year on August 31, 2014. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.

On Nasdaq, Costco shares gained $0.37 or 0.32 percent on Wednesday, and settled at $114.24. In the afterhours trading, the stock gained $0.18 or 0.16 percent further, and traded at $114.42.