Costco earnings and profits jump in Meur

PORTLAND, Oregon - income net of the Costco Wholesale Corp. third quarter rose 6 percent sales increase and costs of membership consisting of lower margins.

But the big club operator has warned that the rising costs of everything, meat of cotton T-shirts will continue to pose a challenge, as it did in the third quarter. The dark news of one of the strongest the nation retailers surprise some investors Wednesday.

"In all, inflation hit her throughout the world," Chief Financial Officer Richard Galanti of Costco said investors. "It will continue."

Costco reported earnings of $ 324 million, or 73 cents per share, far from 77 cents analysts expected. Which increased by 306 million, or 68 cents per share, earned a year ago. But the shares of Costco fell $1.19 to $80.16 in afternoon trading.

A charge of 49 million for an accounting adjustment was that captured most attention. The LIFO charge, which means last-in-first-out, reflects a requirement that the company to reassess its inventory if prices rise or fall notably. Because prices have increased, Costco was to showcase its stocks higher and which added 7 cents per share at its expense.

Costco said he expects to take a similar charge in the quarter course and potentially beyond as commodity prices continue to increase. Galanti said that other retailers can do similar actions.

It is part of a larger struggle for the industry. The increase in the costs of many common goods such as fuel, cereals, cotton and coffee are passed as well as by the manufacturers. Almost every manufacturer of food and beverage to the United States raised prices recently to offset these pressures.

Costco and other retailers, in turn, try to balance the higher prices that they encounter with the desire of consumers for low prices. Costco has raised prices on some goods but resisted the increase in prices on the other. For example, only recently raised prices in its same bakery company if prices for wheat and other ingredients had a leap of several neighbourhoods.

Shoppers have flocked Costco, based in Issaquah, wash., in the economy down for transactions on everything from food to furniture. This trend continued in the latest quarter.

Costco revenues increased 16% to 20.62 billion, just above expectations of analysts surveyed by FactSet. The number of shoppers in its stores and the amount that they spent per visit continues to rise.

Analysts said that continuing trends sales post impressive business and its basic underlying remains solid.

"The overall performance was solid," said Brian Sozzi, an analyst of Wall Street Strategies Inc. "but the fact is that the market aspired to more."