Reuters

(Reuters)

Costco 3Q Profit Rises on Strong Revenue

By Retail FOXBusiness

Carried by solid sales growth, Costco (COST) said Wednesday its fiscal third-quarter profits grew by 6%.

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The largest U.S. warehouse-club operator said it earned $324 million, or 73 cents a share, in the quarter ended May 8, compared with a profit of $306 million, or 68 cents a share, a year earlier.

The recent results included a charge of 7 cents a share.

Revenues increased 16% to $20.62 billion as U.S. same-store sales, excluding currency fluctuations and gasoline, grew by 6% and international sales jumped 11%. Total same-store sales climbed 12%.

Analysts had been expecting EPS of 77 cents on sales of $20.14 billion.

Costco, which operates 581 warehouses, said its gross margins came under pressure, declining to 2.7% from 2.8%.

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The company also said its membership fees last quarter increased to $435 million, up from $395 million the year before.

Shares of Costco dipped 2.24% to $81.35 ahead of Wednesday’s open. The stock had been up more than 12% in 2011 and about 44% over the past year.

Rival BJ’s Wholesale (BJ), which earlier this month reported a 29% increase in fiscal first-quarter profits, slumped 3.39% to $48.50 in Wednesday’s premarkets.

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