Markets

Costco's profit rises, but misses Street expectations

October 9, 2013 / 8:34 AM EDT / AP

ISSAQUAH, Wash. Costco's (COST) fiscal fourth-quarter net income edged up 1 percent as sales at its warehouses rose slightly.

The performance fell short of analysts' estimates, and its stock fell in premarket trading on Wednesday.

For the period ended Sept. 1, the wholesale club operator earned $617 million, or $1.40 per share, up from $609 million, or $1.39 per share, a year earlier.

Analysts surveyed by FactSet expected higher earnings of $1.46 per share.

Revenue edged up 1 percent to $32.49 billion from $32.22 billion as sales improved and it made more money from membership fees.

Wall Street expected $32.52 billion in revenue.

Revenue at stores open at least a year, a key gauge of a retailer's health, climbed 5 percent. The figure rose 5 percent in the U.S. and 4 percent overseas. Removing the impact of fluctuating foreign currency rates, the figure still rose 5 percent for the total company and in the U.S. It rose 7 percent abroad.

Revenue at stores open at least a year excludes the results from stores recently opened or closed.

Costco's stock declined $1.48 to $110.73 in premarket trading about three hours before the market open.

Costco Wholesale Corp.'s full-year net income climbed to $2.04 billion, or $4.63 per share, from $1.71 billion, or $3.89 per share, in the previous year. Annual revenue increased 6 percent to $105.16 billion from $99.14 billion.

Revenue at stores open at least a year rose 6 percent. The metric climbed 6 percent both in the U.S. and internationally as well. Stripping out the impact of fluctuating foreign currency rates, the figures still increased 6 percent for the company and in the U.S. and abroad.

Costco said that revenue at stores open at least a year climbed 3 percent in September. The performance was flat overseas and up 4 percent in the U.S. Taking out the foreign currency translation impact, the metric increased 5 percent. In the U.S., it also rose 5 percent and internationally there was a 6 percent gain.

Costco currently runs 638 warehouses. This includes 454 in the United States and Puerto Rico, 85 in Canada, 34 in Mexico, 25 in the United Kingdom, 18 in Japan, 10 in Taiwan, nine in Korea, and three in Australia. The Issaquah, Wash.-based company plans to open up to an additional 11 new warehouses before year's end.