Costco 4th-quarter profit slips partly on stronger dollar, but tops analysts' estimates

By THE ASSOCIATED PRESS (CP) – 1 hour ago

ISSAQUAH, Wash. — Costco Wholesale Corp. said Wednesday that its fiscal fourth-quarter profit fell 6 per cent, partly on the stronger dollar and increased employee benefit costs, but results beat analysts' estimates.

The warehouse club operator earned US $374 million, or 85 cents per share, for the quarter ended Aug. 30. That's down from $398 million, or 90 cents per share, a year earlier.

Still, the performance was enough to top the 77 cents-per-share forecast of analysts polled by Thomson Reuters. Analysts' estimates generally exclude one-time items.

Revenue slipped 3 per cent to $22.38 billion from $23.1 billion, but surpassed Wall Street's $22.34 billion sales estimate.

Sales at stores open at least a year dropped 5 per cent in the quarter, with a 6 per cent decline in the U.S. and a 3 per cent dropoff internationally. Removing the effect of the stronger dollar and lower gas prices, sales at stores open at least a year edged up 1 per cent.

These figures are considered a key indicator of a retailer's performance because they measure growth at existing stores, rather than newly opened ones.

Issaquah-based Costco has managed to pull in budget-conscious shoppers during the recession with deals on food and everyday items but has been hurt by a pullback in spending on big-ticket items like jewelry and furniture.

For the year, net income slipped 15 per cent to $1.09 billion, or $2.47 per share, compared with $1.28 billion, or $2.89 per share.

Annual sales dipped 2 per cent to $71.42 billion from $72.48 billion.

Costco currently runs 560 warehouses, including 407 in the U.S. and Puerto Rico, 77 in Canada, 32 in Mexico, 21 in the U.K., seven in Korea, six in Taiwan, nine in Japan, and one in Australia.