US gas prices hit Costco earnings

Costco Wholesale Corp., the largest U.S. warehouse club operator, said Friday that weak profits from gasoline sales would mean that earnings for the rest of the fiscal year would probably fall short of Wall Street expectations.

This report caused shares in the company to fall 9 percent Friday. Costco said it expects current quarter earnings to be around 41 cents to 43 cents per share, below Wall Street’s expected profit of 46 cents per share.

The company expects earnings per share in the next quarter to be between 63 cents and 67 cents, again below the Wall Street estimate of 70 cents per share.

Costco offers gas sales at many of its 334 stores in the United States, often charging les than other filling stations in order to attract customers to its stores. With gas prices rising, however, the profitability of Costco’s gas sales has declined.

One of Costco’s rivals, BJ’s Wholesale Club Inc., which also offers gasoline sales at many of its stores, also saw its shares decline in early trading Friday, with a 6 percent drop.

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