Costco Q2 Profit Drops on Stronger Dollar, Discounting

New York City Costco Wholesale Corp. said Wednesday that its fiscal second-quarter profit fell 27% partly on lower non-food sales and some deeper discounting, while the stronger dollar and falling gas prices took a toll on same-store sales.

For the period ended Feb. 15, earnings slid to $239.7 million from $327.9 million a year earlier. Revenue dipped 1% to $16.84 billion from $16.96 billion, just shy of Wall Street's $16.85 billion estimate.

Same-store sales dropped 3% during the quarter. Excluding falling gas prices and the stronger dollar, same-store sales climbed 5%.

"Our quarterly results were hurt by the continued weakness in non-food sales and related margins. Margins in foods and non-foods were also negatively affected by increased pre-holiday seasonal markdowns and other selective price reductions to drive sales and increase market share," CFO Richard Galanti said in a statement.