Costco reports strong quarterly results, stock drops

Costco Wholesale's stock price has fallen 3 percent Wednesday morning despite the company posting a quarterly profit that as 16 percent better than last year and higher than Wall Street analysts expected.

The Issaquah-based chain said its profit for the second quarter ended Feb. 13 was $348 million, or 79 cents a share. Analysts had expected 78 cents a share.

Sales were up 11 percent, to $20.9 million for the quarter, which included Christmas. Membership fees rose 10 percent to $426 million.

Rising gasoline prices are hurting the profitability of its gas operations, CFO Richard Galanti said in a conference call with analysts. The chain also took a hit in the second quarter on legal fees and accounting adjustments for inventory. Tempered by benefits from foreign exchange rates, the total hit was about 2 cents a share, Galanti said.

Read Full Article from Seattle Times

- Posted: 2011-03-02 14:26:03

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