BENGALURU (Reuters) — Costco Wholesale Corp. reported a better-than-expected quarterly profit as increased promotions helped the warehouse club operator deal with fierce competition.

Costco, which caters to relatively higher income customers than Wal-Mart Stores Inc. and Target Corp., reported a 7 percent rise in same-store sales excluding fuel.

Analysts polled by research firm Consensus Metrix had expected same-store sales to increase 5.8 percent.

Net income rose 17 percent to $496 million, or $1.12 per share, for the first quarter ended Nov. 23, from $425 million, or 96 cents per share, a year earlier.

Net sales rose 7 percent to $26.28 billion. Total revenue, which includes membership fees, rose 7 percent to $26.87 billion.

Analysts on average expected a profit of $1.09 per share on revenue of $26.92 billion, according to Thomson Reuters I/B/E/S.

Up to Tuesday’s close of $143.04, shares of the Issaquah, Washington-based company had risen 20 percent this year. The Nasdaq Composite Index had risen 12.6 percent.

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