Costco Q3 profit falls 29%

Issaquah, Wash. Costco Wholesale Corp. reported Thursday that its third-quarter profit dropped 29%, citing impacts from a lawsuit settlement charge and lower sales during the period.

The retailer earned $209.6 million for the period ended May 10, down from $295.1 million a year earlier.

Costco said its quarterly results were partly hurt by a $34 million charge related to a lawsuit settlement involving its membership renewal policy as well as the stronger dollar.

Increased employee benefits costs also weighed on its quarterly performance, the company said, along with the ongoing cutback in discretionary spending.

Revenue dropped 5% to $15.81 billion. Analysts expected revenue of $16.16 billion.

Same-store sales slipped 7% for the quarter, with U.S. same-store sales off 5% and international same-store sales down 12%.

Costco said it remains focused on providing low-priced offerings to shoppers and that its long-term focus will pay off as the economy recovers. On Wednesday the retailer unveiled a pilot program to accept food stamps at two New York stores as part of its response to shoppers’ economic woes.