Updated to 11:32 a.m. EST Costco ( COST) posted strong earnings and revenue gains in its latest quarter, thanks in part to a strike faced by its competitors and the dollar's decline. But will the company be able to keep its momentum going without as much wind at its back? Even with that assistance, the company saw its gross profit margins fall slightly as a portion of sales. While its operating profit rose sharply, part of that improvement was due to lower store-opening costs, an indicator that Costco's expansion is slowing, which could curtail future revenue growth. Part of the improvement also came from an easy comparison with last year, when the company's operating profits took a hit due to a large one-time charge. "I thought
Costco's report was somewhat disappointing," said one hedge fund analyst, who asked not to be named. "If they have a declining sales trend, they're not going to make their numbers." The company expects to meet analysts' expectations more or less in its coming two quarters. Costco expects third-quarter earnings to range from 35 cents to 37 cents a share and its fourth-quarter profits to range from 56 cents to 58 cents a share. Analysts have projected that Costco will hit the midpoint of both ranges. While the analyst's fund doesn't hold any Costco shares, the company's investors seemed to share his concerns. Despite beating Wall Street's earnings per share estimates by a penny, Costco shares were recently down $1.42, or 3.6%, to $38.29. For much of the last month, the shares have been trading near their 52-week high of $40.42. To be sure, the wholesale-club chain posted impressive overall numbers in its fiscal second quarter.