Costco Fails to Please

Shares slip as the company gives soft guidance for the current quarter.
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Costco

(COST) - Get Report

shares slipped Thursday after the warehouse-club operator posted a 16% drop in second-quarter earnings and gave a soft forecast for the current period.

For the quarter ended Feb. 18, Costco's profit fell to $249.5 million, 54 cents a share, from $296.2 million, or 62 cents a share, a year earlier.

The quarter included charges related to stock option errors and an increase in sales. The company also recorded a benefit related to an excise tax refund.

Excluding items, Costco earned 66 cents a share, matching analysts' expectation, according to Thomson Financial.

Revenue increased 7.5% to $15.11 billion, short of Wall Street's forecast of $15.5 billion.

Same-store sales, or sales at stores open at least a year, increased 5% in the quarter. Costco also said that same-store sales for February rose 4%, short of Wall Street's estimate of 5.1%.

On its conference call, Costco forecast third-quarter earnings of 52 cents to 56 cents a share, excluding payroll-related charges. Analysts, on average, target earnings of 57 cents a share.

Shares of Costco were down $2.01, or 3.6%, to $54.11 in recent trading.