Stronger Dollar Hurts Costco 1st-Quarter Results

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Warehouse-club operator Costco Wholesale Corp. said Thursday fiscal first-quarter profit was nearly flat, as consumers pulled back on spending except for necessities such as food while the stronger dollar hurt international sales.

Profit for the three months ended Nov. 23 rose less than 1 percent to $262.5 million, or 60 cents per share, from $262 million, or 59 cents per share, a year earlier. Results include charges of 5 cents per share related to an accounting adjustment stemming from life-insurance contracts and the impairment of corporate investments.

Revenue rose 4 percent to $16.39 billion from $15.81 billion last year.

Analysts polled by Thomson Reuters, on average, predicted a profit of 62 cents per share on revenue of $16.6 billion. Analyst estimates typically exclude one-time items. The company said in October that it expected to earn 61 cents to 65 cents per share.

Sales on stores open at least one year, a key retail metric known as same-store sales, rose 1 percent, including a 3 percent rise in the U.S. and a 7 percent decline internationally.

The company said international results, mainly in Canada, the U.K. and Korea, were hurt by the stronger dollar.

Customers pulled back on spending on all items outside of food, especially in the later part of the quarter, Issaquah, Wash.-based Costco said.

Costco operates 550 warehouses in the U.S. and Puerto Rico, Canada, the U.K, Korea, Taiwan, Japan and Mexico

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