Costco third-quarter profit tops estimates as margins improve

Costco Wholesale Corp., the largest U.S. warehouse-club chain, posted third-quarter profit that topped analysts’ estimates as margins improved for the first time in more than a year.

Net income rose to $386 million, or 88 cents a share, in the quarter ended May 6, from $324 million, or 73 cents, a year earlier, the Issaquah, Washington-based company said today in a statement. Excluding some items profit was 89 cents a share. Analysts projected 87 cents, the average of 24 estimates.

Chief Executive Officer Craig Jelinek has been luring customers with low prices on everything from baked goods to gasoline. The chain has also added more service areas, such as pharmacies and vision centers, to its locations to claim more of its members’ spending.

Costco fell 0.1 percent to $83.31 yesterday in New York. The shares have advanced 3.7 percent in 12 months.

The retailer’s in-store gross margin, or the percentage of store sales left after subtracting the cost of goods sold, widened to 10.55 percent from 10.51 percent a year earlier. That marked the first year-over-year gain in five quarters.

Same-store sales, a key metric for retailers because only established locations are counted, rose 5 percent, excluding changes in gas prices and currency rates. Net sales gained 8 percent to $21.85 billion with membership fees advancing 9.2 percent to $475 million.