Costco Wholesale said its sales stagnated in its third quarter, and the bulk seller also gave investors a glimpse into how much a wage increase for its store workers could affect its bottom line.
Costco said that for the quarter ended May 8, companywide comparable sales were flat, and total revenue rose 2.6% to $26.77 billion, below analysts' forecasts for $27.07 billion. Comparable sales have languished lately for the second-biggest U.S. retailer by sales; before a slight uptick in the second quarter, the metric had declined for three straight periods.
The company said lower gasoline prices and foreign-currency fluctuations again hurt comparable sales -- it said they would have risen 3% when excluding those factors.
The report is the first for Coscto since it said it would raise its minimum wage for store workers for the first time in nine years. The company had said it would boost what it paid those workers starting in March, and the move helped push total operating expenses 2.5% higher during the quarter. The company's selling, general and administrative costs jumped 5.9% from a year earlier to $2.73 billion, while merchandise costs increased 2.1% to $23.16 billion.
Over all for the quarter, Costco reported a profit of $545 million, or $1.24 a share, up from $516 million, or $1.17 a share, a year earlier. Analysts surveyed by Thomson Reuters had expected $1.22.
In the latest period, membership fees rose 5.8%, while sales, which account for the bulk of revenue, climbed 2.5%.
Shares of Costco closed up 1.4% to $144.54 on Wednesday. They have fallen 11% so far this year.
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