Costco Wholesale Q3 Profit Rises, Beats View

(RTTNews) - Membership warehouses operator Costco Wholesale Corp. (COST) on Wednesday reported a 9 percent increase in profit for the third quarter from last year, reflecting higher membership fees and an increase in comparable sales that excludes the negative impacts from gasoline price deflation and a stronger dollar.

Adjusted earnings per share for the quarter beat analysts' expectations, while revenues missed their estimates.

For the third quarter, net income attributable to Costco increased to $516 million or $1.17 per share from $473 million or $1.07 per share in the previous year.

On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $1.16 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 1 percent to $26.10 billion from $25.79 billion a year ago, but missed analysts' consensus revenue estimate of $26.63 billion.

Net sales also increased 1 percent to $25.52 billion from $25.23 billion in the same quarter last year. Membership fees were $584 million, higher than $561 million a year earlier.

However, comparable sales for the quarter declined 1, compared to a 2 percent increase in the same period last year. In the U.S., comparable sales rose 1 percent, while international sales declined 6 percent.

Excluding negative impacts from gasoline price deflation and foreign exchange, total comparable sales rose 6 percent, with 5 percent increase in the U.S. and 7 percent growth in international comparable sales.

Costco currently operates 673 warehouses, including 474 in the U.S. and Puerto Rico, 89 in Canada, 35 in Mexico, 26 in the UK, 20 in Japan, 11 in Korea, 10 in Taiwan, seven in Australia and one in Spain. The company also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.

Costco said it plans to open up to an additional 15 new warehouses, including one relocation to a larger and better-located facility, prior to the end of its fiscal year on August 30, 2015.

COST closed Wednesday's regular trading session at $145.42, up $2.17 or 1.51 percent. However, in after-hours, the stock declined $0.47 or 0.32 percent to $144.95.