Costco profits lower, but beat expectations
PORTLAND – Costco Wholesale Corp. said Wednesday that a stronger dollar and higher employee health care costs helped drive its fiscal fourth-quarter profit down 6 percent, but the results beat analysts’ expectations.
The members-only warehouse club chain earned $374 million, or 85 cents per share, for the quarter, down from $398 million, or 90 cents per share, in the same quarter last year.
Revenue fell 3 percent to $22.38 billion for the period that ended Aug. 30.
Still, the performance topped the average forecast of earnings of 77 cents per share on $22.34 billion in revenue among analysts polled by Thomson Reuters.
The shares rose $1.36, more than 2 percent, to $59.29 by early afternoon Wednesday.
Costco said food and necessities remain most popular with consumers but monthly sales figures following the quarter show sales of other nonfood items may have started rebounding.
Janney Montgomery Scott analyst David Strasser said the quarter was a sign that better days lie ahead for the Issaquah, Wash.-based company.
Costco’s improved gross margin and a lower tax rate helped its profit, he said. And its stronger monthly sales figures and continued membership growth will help the company as it moves forward.
Strasser reiterated a “buy” rating on Costco shares.
© Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.