Costco Quarterly Profit Falls 4.9% Due to Charge, But Sales Rise
Warehouse retailer Costco Wholesale said Thursday its fiscal third-quarter profit declined 4.9 percent due to a charge, but sales advanced at a double-digit pace.
Income for the quarter ended May 13 slid to $224 million from $235.6 million. Per-share earnings were flat at 49 cents.
The latest quarter includes a $30.3 million charge to reflect the reduced gross margin on estimated future returns recorded in the increased sales return reserve.
Excluding the item, earnings per share were 56 cents, in line with the average analyst estimate, according to a Thomson Financial survey.
Sales rose 10 percent to $14.34 billion from $13.01 billion but were shy of the consensus estimate of $14.68 billion.
Costco booked a reserve to increase its sales returns reserve balance that trimmed sales in the most recent quarter by $228.2 million. Excluding the reserve, sales rose 12 percent to $14.57 billion.
Quarterly same-store sales rose 7 percent, reflecting a 7 percent domestic increase and 10 percent international growth.
Same-store sales, or sales at stores open at least a year, are a key measure of retailer performance, because they measure growth at existing stores rather than from newly opened ones.