ECONOMY

Costco shares rise as earnings top Wall Street expectations

Costco shares rose in after-hours trading after the warehouse club company reported earnings that topped Wall Street expectations.

The Issaquah, Washington-based company said Thursday that net income in its most recent quarter came to $700 million, or $1.59 per share, up from $545 million, or $1.24 per share, in the same period last year.

Stripping out one-time items, earnings came to $1.40 per share in the quarter that ended May 7; analysts surveyed by Zacks Investment Research predicted $1.31 per share.

Revenue rose 7.8 percent to $28.86 billion, edging past the $28.65 billion estimate from Zacks' analysts. Sales and how much members pay in annual fees both rose.

A key revenue figure that strips out the impact from brand-new stores rose 5 percent, with stronger growth in Costco's U.S. stores — 6 percent — compared with its much smaller number of international locations. Of Costco's 732 stores, 510 are in the U.S

An additional boost in membership fees could come this quarter; a price increase is slated to go into effect June 1.

Costco Wholesale Corp. shares had increased 9 percent since the beginning of the year, while the Standard & Poor's 500 index has increased nearly 8 percent. Shares rose 1 percent to $174.73 Thursday and added an additional 1.8 percent after the market closed.

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Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on COST at https://www.zacks.com/ap/COST

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Keywords: Costco, Earnings Report