Costco Quarterly Profit Falls 16%

Costco Wholesale on Thursday said its quarterly profit fell 16%, hurt by charges for expensing stock options.

The largest U.S. warehouse club operator reported net income of $249.5 million, or 54 cents a share, for its fiscal second quarter ended Feb 18, compared with $296.2 million, or 62 cents a share, a year ago.

The latest quarter included two charges related to a revised return reserve and a tax-related charge for stock options, offset by a benefit covering an excise tax refund. Excluding all items, including the stock options expensing, Costco reported earnings of $302.9 million, or 66 cents a share.

Analysts, on average, were expecting earnings of 66 cents a share, according to Thomson Financial.

Revenue rose 7.5% to $15.1 billion from $14.06 billion a year earlier, with net sales and membership fees both posting gains.

On average, analysts surveyed by Thomson Financial forecast a quarterly profit of 66 cents a share and sales of $15.48 billion.

Same-store sales, or sales in stores open at least a year -- a key retailer metric -- rose 5% for the quarter.

The company also said February same-store sales rose 4%, shy of the average analyst estimate of 5.1% growth, based on a Thomson Financial survey.