Costco Wholesale Corp. (COST) on Friday said earnings for the rest of its fiscal year would likely miss Wall Street forecasts because of weaker profits from gasoline sales, sending its shares down 9 percent.

The largest U.S. warehouse club operator said profit margins were lower than expected, principally from gasoline sales. Costco operates gas stations at many of its 334 U.S. stores. The retailer often charges less than traditional gas stations do in hopes of bringing customers in to its stores.

But with energy prices soaring, Costco has struggled to maintain profitability on gasoline sales.

Shares of rival BJ's Wholesale Club Inc. (BJ), which also has gas stations at many of its warehouse stores, fell 6 percent in New York Stock Exchange trading.

Costco is the largest player in a warehouse club sector that also includes Wal-Mart Stores Inc.'s (WMT) Sam's Club (search). Costco has won customers by offering luxury items such as expensive French wines and diamond rings alongside the usual warehouse club bulk items.

But the Issaquah, Washington-based retailer has not always been a favorite on Wall Street. Analysts have long criticized the company's steep labor cost, which have hurt profits.

Costco has taken steps to lower healthcare and other costs and its share price has climbed more than 30 percent in the last two years, but some on Wall Street remain wary.

"If it's not one thing then it's another," J.P. Morgan analyst Shari Eberts wrote in a note to clients.

"Costco's operating performance is rarely consistent, putting its growth rate at risk. While earnings per share grew strongly in fiscal 2004, it was flattish in 2003 and should be less than 10 percent this year. The culprit ranges from sales misses to expense control issues to gross margin issues."

Costco said it now expects earnings per share for its fiscal third quarter, ending May 8, to be in the range of 41 cents to 43 cents. Wall Street expected 46 cents per share profit, on average, according to Reuters Estimates.

Costco had said in early March that analysts' forecasts at the time were at the high end of company expectations.

For the fourth quarter, it said it expects earnings per share of 63 cents to 67 cents, below analysts' average forecast of 70 cents.

"Despite satisfactory sales and membership results, and reasonably good expense control, our gross margins were lower than planned, principally from gasoline sales," chief financial officer Richard Galanti said in a statement.

Costco also raised its quarterly cash dividend to 11.5 cents per share from 10 cents. The dividend is payable May 27 to shareholders of record on May 6.

Jaison Blair, retail analyst with Rochdale Research, said the profit outlook was "disappointing" but added that fuel costs eventually balance out and Costco can still reap some benefit from bargain-hunting shoppers.

"They offer cheap fuel, and that draws more consumers who are looking for a bargain," said Blair, who rates Costco shares "buy" and personally owns the stock. "While they're there, they say, 'Let's go in and buy some crystal or china."'

Shares of Costco fell $4.03, or 9.2 percent, to $39.99 in Nasdaq trading. BJ's shares lost $1.79, or 6.1 percent, to trade at $27.34 on the NYSE.