Costco Posts Flat Quarterly Earnings On Modest Sales Increase

December 11, 2008 7:05 p.m. EST

New York, NY (AHN) - Costco Wholesale Corp. announced Thursday fiscal first quarter earnings were relatively unchanged from a year ago as negative effects of currency exchange rates cut into the bottom line.

The wholesale club operator posted fiscal first quarter earnings of $262.5 million or 60 cents a share, compared to $262 million or 59 cents a share in the same period a year earlier.

Revenue rose nearly 4 percent to $16.04 billion from $15.47 billion last year. The company saw a small increase in same-store sales, up 1 percent for the quarter.

Costco CFO Richard Galanti said the company saw a $22.7 million negative impact to pre-tax earnings due to the strengthening of the U.S. dollar during the quarter against the Canadian, United Kingdom and Korean currencies.

Galanti also said, "Results were hurt by a slowdown in non-food discretionary sales and related reductions in margins associated with these sales, primarily in the latter half of the quarter."

The company did report strong profit from gasoline sales compared to a year ago. Costco generally sell their gasoline to club members at a discount compared to local stations.

Shares of Costco fell 3 percent on Thursday to close at $52.06.