Costco Wholesale shares dropped as much as 3.6 percent as the warehouse retailer reported a bigger-than-expected 15 percent drop in second-quarter profit on unusually deep discounting in the holiday shopping season.
Bad weather and six fewer shopping days between Thanksgiving and Christmas prompted many retailers to deepen discounts and increase promotions to lure shoppers.
Weaker gross margins and lower international profit due to a weakening of foreign exchange rates hurt earnings, Chief Financial Officer Richard Galanti said.
Costco’s sales rose 6 percent to $25.76 billion in the quarter, missing the average analyst estimate of $26.65 billion. Net profit fell to $463 million, or $1.05 per share, in the quarter from $547 million, or $1.24 per share, a year earlier. Costco shares closed at $113.25, down 2.8 percent.