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Costco’s profit drops but sales grow

Post by Marcelene Edwards on May 31, 2007 at 6:50 am with No Comments »
May 31, 2007 6:50 am

Warehouse retailer Costco Wholesale Corp. said Thursday its fiscal third-quarter profit declined 4.9 percent due to a charge, but sales advanced at a double-digit pace, The Associated Press reports.

Income for the quarter ended May 13 slid to $224 million from $235.6 million. Per-share earnings were flat at 49 cents.

The latest quarter includes a $30.3 million charge to reflect the reduced gross margin on estimated future returns recorded in the increased sales return reserve. Excluding the item, earnings per share were 56 cents, in line with the average analyst estimate, according to a Thomson Financial survey.

Sales rose 10 percent to $14.34 billion from $13.01 billion but were shy of the consensus estimate of $14.68 billion.

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