Costco Wholesale Corp. (NASDAQ: COST) on Wednesday released its Second-quarter earning report, showing slow revenue growth again as the effect of strong dollar and higher cost.
The retailer said the profit fell 8.7 percent to $546 million, or $1.24 per share in the quarter ended Feb. 14, compared with $598 million, or $1.35 a share a years ago. The total revenue, which includes membership fees, rose 2.6 percent to $28.17 billion.
The result missed analysts’ estimates. Analysts had a projection of $1.28 a share on $28.42 billion in revenue.
Costco’s comparable-store sales, a closely watched measure by investors, rose 1 percent in the second quarter. The company said that the comparable sales would rise 5 percent without the impact of currency fluctuations and lower fuel prices.
Costco is now operating 698 warehouses in the world. Most of the stores are located in the U.S. and Puerto Rico. Costco is not only a retailer but also one of the largest fuel sellers in U.S. The company said that lower oil price hurt overall sales growth in the fuel business. The company also said that the increase in merchandises costs and overhead expenses hurt the revenue.
Costco also announced to raise minimum wage for the first time in nine years in a conference on Thursday. The second-largest U.S. retailer will raise wage by $1.50 an hour to $13 to $13.50 an hour. The company expected that the action will cut its earnings per share by 1 cent in next quarter and by 2 cents in the following three quarters.
“It will help, and it is important to do,” said Richard Galanti, Costco’s chief financial officer. “This is a physically challenging job. You’re on your feet, lifting cases, moving carts, and we thought it was time to do it.”