Shares of Costco (COST) ticked lower on Wednesday after the wholesale warehouse operator reported weaker-than-expected quarterly earnings.

The results come despite a 5% increase in first-quarter sales, with Costco weighed down by a 7.2% increase in selling, general and administrative expenses.

The Issaquah-Wash.-based company reported net income of $425 million, or 96 cents a share, compared with a year-earlier profit of $416 million, or 95 cents, short of average analyst estimates of $1.02 a share in a Thomson Reuters poll.

Revenue for the three months ended Nov. 24 increased to $25 billion from $23.7 billion a year ago, led by a 5% increase in sales and higher membership fees. However, sales missed the Street’s view of $25.35 billion.

Same-store sales, a key growth metric measuring sales at stores open longer than a year, was up 3%.

Shares of Costco, which operates a chain of 648 membership warehouses, fell about 1.6% in recent trade to $118.03.

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