Costco quarterly profit beats on online sales strength

A Costco store in Richmond, Calif., March 6, 2014.
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A Costco store in Richmond, Calif., March 6, 2014.

Retailer Costco Wholesale on Thursday reported quarterly profit and revenue that beat analysts' estimates, as its investments in online business paid off.

The membership-based retail chain has been investing heavily to bolster its e-commerce capabilities, launching initiatives such as two-day delivery on dry groceries and a same-day service through a partnership with Instacart to combat Amazon.com's online dominance.

Costco's comparable online sales, excluding the impact of fuel and currency fluctuations, rose 42.1 percent in the first quarter, after climbing 21 percent in the previous quarter.

Net income attributable to the company rose to $640 million, or $1.45 per share, in the first quarter ended Nov. 26, from $545 million, or $1.24 per share, a year earlier.

Excluding items, the company earned $1.36 per share, while revenue rose 13.2 percent to $31.81 billion.

Analysts on average had expected the company to report a profit of $1.34 per share and revenue of $31.48 billion, according to Thomson Reuters I/B/E/S.

In November, the company reported a 7.9 percent rise in comparable store sales, excluding the impact of fuel and currency fluctuations. Analysts on average had estimated a 5.6 percent rise.

Shares of the Issaquah, Washington-based company, which hit a record high earlier in December, were marginally up in extended trading on Thursday.