Costco March Sales Weaker Than Expected

Costco Wholesale Corp. posted a larger-than-expected drop in comparable sales in March as the wholesale giant was hurt by the timing of an earlier Easter.

Costco said its comparable sales, which include sales from stores open more than a year, fell 2% in the five weeks ended April 5, missing analysts' expectation for a 1.2% drop, according to Thomson Reuters.

The closely watched metric was flat in the U.S., while international sales fell 9%.

Separately, Costco on Thursday addressed claims over fake distribution channels for its products in China, saying it reserves the right to take legal action against unauthorized sites. Costco officially sells its products in China through one online seller: Alibaba Group Holding Ltd.'s Tmall Global platform.

The period included one less selling day than a year ago due to the timing of Easter, which Costco estimated brought down its comparable sales by 1% to 1.5%.

Excluding negative impacts from gasoline price deflation and foreign exchange, Costco said comparable sales increased 4% in March.

Costco, the second-largest retailer in the U.S. behind Wal-Mart Stores Inc., has been a standout of late in the sector and is one of the largest fuel retailers in the U.S. The recent sharp decline in fuel costs was thought to help its results because the prices Costco pays for gas were seen falling faster than the prices it was charging consumers at the pump.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

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