Warehouse club operator Costco Wholesale reported third-quarter results below analysts' estimates hurt by an increase in merchandise costs and other expenses.
Merchandise costs in the quarter ended May 11 rose about 7 percent to $22.55 billion while selling, general and administrative expenses rose about 8 percent.
Net income for the quarter rose to $473 million, or $1.07 per share, from $459 million, or $1.04 per share, a year earlier.
Net sales at the largest U.S. warehouse operator rose 7 percent to $25.23 billion.
Analysts on average expected a profit of $1.09 per share on revenue of $25.76 billion, according to Thomson Reuters I/B/E/S.
Shares of Costco moved higher in premarket trading following the announcement. (Click here to get the latest quote.)