Costco's Net Falls on Staff Costs, Lower Sales

Source: Wall Street Journal

Costco Wholesale Corp.'s fiscal third-quarter earnings fell 29%, mainly due to lower revenue, a $34 million litigation settlement and higher staff benefit costs.

While warehouse and discount retailers like Costco -- known for selling big packages of household goods -- have held up better than other retailers, the company has been hit still by the weakened economy. Slumping gas prices have cut into revenue, as has the stronger dollar.

For the period ended May 10, 2009, Costco posted income of $209.6 million, or 48 cents a share, down from $295.1 million, or 67 cents a share, a year earlier. Revenue decreased 4.8% to $15.48 billion from $16.26 billion as overall same-store sales fell 7%, though were up 2% on an adjusted basis.

Analysts surveyed by Thomson Reuters expected earnings of 53 cents and revenue of $16.17 billion.



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has refused to lay off employees or cut benefits during this recession. This is the kind of thing that would piss off shareholders holding a lot of stock but it sure as hell sits well with the people that work and shop with them. They're still earning a profit and not cutting everything out of their organization.

I love Costco, it's really nice going to a store where the employees act like they give a shit unlike the poor drones working in a shithole Walmart or Sams Club.

Well done Costco.

Those pesky staff.

makes a difference when the people stand behind their products

They treat their staff well, I get great quality stuff and treated well to boot. And frankly, smart long term stock holder know this is a buy and hold stock. This is a long term investment (good for America). I out to add some more to my portfolio.

So what is the beef here...they are making a profit in these hard times-they just aren't making an extreme obscene profit by laying off staff like some of these others. Hell, I think they are doing great and are poised for a strong come back when things turn around. And it will be business leaders like Costco that will lead the way.

Yeah, blame labour and cut your own throat.

The company I work for is going through the same "painful" times (not enough tens of millions in profit) and we are offshoring and cutting jobs left and right. How much frigging money is enough? Costco seems to be one of the better publicly owned companies out there.