Costco Profit Falls 12%; Energy Costs a Cause

Costco Wholesale Corp. reported a 12% decline in profit for its fiscal third quarter to $105 million, or 23 cents a share, matching analysts’ forecasts, as higher energy costs in California and expenses for opening new stores weighed on results. Sales rose 12% to $7.56 billion, and sales at stores open at least a year grew 5%.

The company told analysts that its sales had picked up in recent weeks, and it repeated its fourth-quarter forecast for earnings of 39 to 41 cents a share. A year earlier, Costco earned 43 cents a share.

Issaquah, Wash.-based Costco is seen as more vulnerable to energy price spikes than other retailers because about 30% of its 360 stores are in California, which has been plagued with power shortages and outages in recent months.

Store pre-opening expenses nearly doubled from the year-earlier quarter to $12.8 million as the company opened nine stores, compared with two a year ago. Shares of Costco were up $1.62 to $38.91 on Nasdaq.