Costco proft rises but misses estimates

ISSAQUAH, Wash. — Costco Wholesale Corp., the nation’s biggest warehouse retailer, on Wednesday reported its third-quarter profit rose about 12 percent, aided by higher sales and membership fees.

However, the results missed Wall Street’s average view by a penny a share. Costco said spiraling prices at the pump squeezed profit in its gasoline business. It said that while it was comfortable with analysts’ forecasts for the current quarter and full year, high gas prices would continue to weigh on its gross margin.

Shares of Costco, which competes with Wal-Mart Stores Inc.’s wholesale chain Sam’s Club, shed 63 cents, or 1.2 percent, to close at $52.93 on the Nasdaq Stock Market.

Costco is the second big retailer this week to say that escalating gasoline prices are hurting its performance. Over the weekend, Wal-Mart estimated May sales in stores open at least one year would rise at the low end of its forecast, due to higher gasoline and utility prices.

The quarter’s results were “pretty good, given weak gasoline profitability and a higher than estimated tax rate,” Chief Financial Officer Richard A. Galanti said in a conference call.