Higher expenses and the impact of foreign currency fluctuations and gas deflation led to sales and earnings results that were slightly below forecasts and analyst expectations for Costco Wholesale, the retailer said Wednesday.
The Issaquah, Wash.-based club retailer said overall sales totaled $26.6 billion in the quarter, a 1.3% increase from the same period last year. Same-store sales decreased by 1%, but when adjusted for currency and gas price fluctuations, U.S. comp sales increased by 6%.
Net income totaled $480 million, or $1.09 per diluted share, a 3.2% decrease from the same period last year. Analysts had expected EPS of $1.17.
In a conference call discussing results, Richard A. Galanti, CFO, said expenses in the quarter were up due to a variety of factors including foreign exchange rates, higher stock compensation, legal fees, investments in technology and the transition of a credit card program. The period also lapped a favorable legal settlement in the year-ago period. Galanti said sales of food and sundries were up in the mid-single-digits year-over-year, saying that sundries, meat, deli and spirits were “standouts.”
Costco stock Wednesday was down by more than 5%.
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