Costco Same-Store Sales Rise After String of Declines

By Ezequiel Minaya 

Costco Wholesale Corp. on Wednesday logged a better-than-expected rise in profit for its fiscal first quarter, as same-store sales grew for the first time in the past three quarters.

Shares of the big box retailer, which have fallen 7.9% over the past 12 months, fell 1% after hours to $152.30 as overall revenue fell just short of Wall Street expectations.

The latest results come amid the relatively upbeat outlook for the holiday season among some of the biggest players in the challenged retail sector. Macy's Inc. and Kohl's Corp. have posted optimistic outlooks for the crucial holiday season, despite continuing struggles with changing shopping habits and competition from discounters. And last month, Wal-Mart Stores Inc. also chimed in with the expectation that consumer spending would remain solid during the holidays.

Much of the sector has struggled to keep pace with Amazon.com Inc., however, which has e-commerce sales greater than the combined e-commerce sales of the next 20 U.S. retailers, Costco among them.

Same-store sales for Costco, which have been lackluster in recent quarters, rose 1%, an improvement over the 1% retreat logged a year ago and matching the forecast of analysts polled by FactSet.

For the November quarter, Costco reported a profit of $545 million, or $1.24 a share, up from $480 million, or $1.09 a share, a year earlier. Revenue rose 3.2% to $28.1 billion. Net sales climbed 3.2% to $27.5 billion, while membership fees rose to $630 million from $593 million.

Analysts surveyed by Thomson Reuters were looking for earnings of $1.19 a share on $28.3 billion in revenue.

The latest period benefited from a $51 million legal settlement that contributed 7 cents a share to earnings, the company said.

Write to Ezequiel Minaya at [e-mail]

(END) Dow Jones Newswires

December 07, 2016 17:18 ET (22:18 GMT)

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