UPDATE: Costco Q2 Profit Tops Expectations

reported stronger-than-expected earnings for the fiscal second quarter. The Issaquah, Washington-based company posted a quarterly profit of $598 million, or $1.35 per share, versus a year-ago profit of $463 million, or $1.05 per share. Its total revenue gained 4.4% to $27.45 billion, while sales surged 4.3% to $26.87 billion. However, analysts were estimating a profit of $1.18 per share on revenue of $27.65 billion. Its revenue from membership fees climbed 5.8% to $582 million, while merchandise costs rose 3.7% to $23.9 billion in the same period. Costco's same-store sales climbed 2% in the quarter. U.S. same-store sales gained 4%. Richard Galanti, Chief Financial Officer said, "Net income was positively impacted by a $57 million ($0.13 per diluted share) tax benefit in connection with February's special cash dividend to the extent received by the Company 401(k) plan participants. In addition, this quarter's net income was negatively impacted by a $14 million ($0.03 per diluted share) tax charge relating to an ongoing income tax matter." Costco shares fell 0.14% to close at $147.17 yesterday.