Quick Stats

Quick Stats

    You are here

    Costco's Earnings Outlook Drops on Fuel Price Hikes

    ISSAQUAH, Wash. -- Citing rising gasoline prices as the culprit, Costco today warned investors that profits for the second half of its fiscal year will not meet expectations.

    ISSAQUAH, Wash. -- Citing rising gasoline prices as the culprit, Costco today warned investors that profits for the second half of its fiscal year will not meet expectations.

    The wholesale club retailer, based here, updated its outlook presented during the company's second quarter earnings conference call held March 2. The new estimates for earnings per share for the third quarter are expected to be in the 41-cent to 43-cent range; for the fourth quarter, in the 63 cent to 67 cent range; and for the fiscal year in the $1.98 - $2.04 per share range.

    During the March 2 call, Costco had predicted earnings estimates for third quarter and fiscal year earnings per share of 47 cents and $2.11, respectively.

    Actual results for the third quarter will be reported on May 26th. "Despite satisfactory sales and membership results, and reasonably good expense control, our gross margins were lower than planned, principally from gasoline sales," said Richard Galanti, Costco's c.f.o., said in a statement.

    In related news, Costco's board of directors today declared a quarterly cash dividend on Costco Wholesale common stock, and approved its increase from 10 cents per share each quarter to 11.5 cents per share each quarter, or 46 cents-per-share annually. The dividend of 11.5 cents-per-share is payable May 27, 2005.

    At the close of trading on Friday, Costco's stock had dropped 8.5 percent, to $40.17, after the revised outlook hit the street.

    Related Content

    Related Content