Updated from 12:57 p.m. EDT

In reporting its third-quarter earnings on Wednesday, Costco ( COST) gave bulls and bears both something to chew on.

The wholesale club chain reported strong earnings growth in the quarter, boosted by strong comparable-store sales. But the company also reported continuing trouble with its operating expenses and announced that its total store openings this fiscal year would come in below its previous projections.

Although the company is performing well compared to its competition, it could be doing a lot better, said one hedge-fund manager, who asked not to be named.

"They've done a great job for their employees. They've done a great job for their customers. But they've done a mediocre job for shareholders," said the fund manager, who does not have a position in Costco.

Despite this sentiment, the bulls were winning the day in afternoon trading, as Costco's stock was up 97 cents, or 2.7%, to $36.89.

In its quarter ended May 11, Costco earned $153.8 million, or 33 cents a share. On a per-share basis, the company's earnings were up 18% from the year-ago period.

Meanwhile, the company's sales, excluding membership fees, increased 11% in the quarter to $9.34 billion. On a same-store basis, which compares similar outlets open more than one year, Costco's sales grew 6% over the year-ago period.

Blaming the weather and the war in Iraq, many other large retailers posted weak comparable-store sales in their just-completed quarters. Costco's performance outpaced its two chief rivals, Wal-Mart's ( WMT) Sam's Club and BJ's Wholesale Club, which posted comparable-store sales gains of 2.2% and 5.7%, respectively, in their just-completed quarters.

"(Costco's) comps were outstanding," said another fund manager, who also asked not to be named and who holds no position in the company. "Six percent in this environment, that's really terrific."

Much of Costco's bottom-line lift came from gasoline sales. As gasoline prices fell in the quarter, the company was able to retain some of its profit margin, dropping prices to customers slower than its costs were falling.

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