Costco lowers 4Q earnings outlook

ISSAQUAH, Wash. Costco Wholesale announced that it now expects earnings per share for the fourth quarter to be well below its first call estimate of $1.00. Actual results for the fourth quarter and the fiscal year will be reported on Oct. 8.

According to Richard Galanti, cfo of Costco, "Factors negatively affecting our fourth quarter earnings outlook arise largely from inflation, particularly as to energy costs. They include a significantly greater-than-anticipated LIFO charge; an anticipated negative swing in year-over-year profitability in our gasoline operations; and slightly lower-than-planned merchandise profits related to holding selling price points to help drive sales and maintain the confidence of our members. Our comparable sales results remain strong relative to other retailers and we believe our growth outlook remains positive, with 20 to 25 additional new units planned for our 2009 fiscal year."