Costco follows Walmart in hiking minimum wage

Costco Wholesale will increase minimum pay for its workers this month for the first time in nine years, hiking its base pay by $1.50, to $13 to $13.50 an hour.

The move follows a pay increase to $10 an hour this year by competitor Walmart, which operates the Sam's Club chain.

Costco Chief Financial Officer Richard Galanti told analysts Thursday the increase will hurt its earnings for the current quarter by a penny per share, and 2 cents per share each quarter for the following three quarters.

Costco's stock slipped Thursday, a day after the warehouse club operator said its fiscal second-quarter profit fell nearly 9 percent as costs rose.

From minimum wage hikes to open carry, new laws for 2016

Sales, however, did rise, the company said late Wednesday. Sales at its stores open at least a year, considered an important measure of a retailer's health, rose 1 percent. The gain came from its roughly 490 U.S. stores, with sales rising 3 percent. They fell 7 percent in Canada and fell 3 percent at its other international stores.

The Issaquah, Washington, company has nearly 700 total stores around the world.

Rising costs took a bite out of its profit. Merchandise costs rose 2.4 percent to $24.5 billion and its other costs rose 6 percent to $2.8 billion.

Costco reported net income of $546 million, or $1.24 per share, in the quarter ended Feb. 14, compared with $598 million, or $1.35 per share, in the same quarter the year before. Analysts expected earnings of $1.28 per share, according to FactSet.

Revenue, which includes sales and membership fees, rose 2.6 percent to $28.2 billion in the quarter, below the $28.5 billion analysts expected, according to FactSet.

Shares of Costco Wholesale Corp. fell $1.19 to $151.60.