Costco profits in first quarter 2014
Increased traffic at Costco helped fueled sales in the first quarter of 2014.
The company reported sales of $24.47 billion for the quarter, an increase from the $23.20 billion reported in first quarter 2013.
The company also produced a profit of $425 million, compared with the $416 profit last year.
Same-store sales for the quarter increased by 3%, including 3% in the United States and 1% in stores abroad.
While profits increased over the last quarter, the company's earnings per share of 96 cents fell short of the $1.03 expected by analysts.
Guggenheim Securities analyst John Heinbockel gave Costco's stock a "neutral" rating, noting that the results, while "disappointing," were not due to the health of the company itself, but rather factors such as a stronger U.S. dollar, decline in gross profits on gas and an unusual step-up in stock compensation expense. Additionally, the chain's Canadian business was described as "robust," with an 8% increase in same-store sales.
Costco's stock was at $118.35 per share on the NASDAQ in late-afternoon trading Wednesday, after opening at $118.10 and hitting a high of $120.30.
Costco's quarterly results follow reports of increased traffic but less spending in November. Although the company didn’t comment specifically on Thanksgiving weekend sales during a recorded call to recap its monthly results, the company confirmed that traffic increased a little more than 4% while average transaction sizes were down slightly. Costco and its direct competitors Sam’s Club and BJ’s Wholesale Club were closed on Thanksgiving Day.