Costco quarterly sales miss estimates amid rising competition

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(Reuters) – Costco Wholesale Corp (O:) on Thursday reported quarterly revenue below Wall Street estimates, as the U.S. hypermarket chain struggled to lure shoppers in a competitive grocery space, sending its shares down about 2% in extended trading.

U.S. grocers compete fiercely to attract shoppers and also face the threat of Inc (O:) expanding into the space, forcing Costco and other grocers to slash prices and invest heavily in stores and online.

In August, Costco opened its first store in Shanghai where overcrowding and traffic jams in the neighborhood forced the retailer to limit the number of shoppers in the store.

Comparable-store sales, or those recorded at Costco’s e-commerce platform and warehouses open for more than a year, rose 5.1%, excluding the impact of fuel and currency fluctuations. Analysts estimated a 5.25% rise, according to IBES data from Refinitiv.

In the United States, comparable store sales, excluding fuel, rose 5.2%, also missing the estimate of 5.32%.

Net income attributable to the company rose to $1.10 billion, or $2.47 per share, for the fourth quarter ended Sept. 1, from $1.04 billion, or $2.36 per share, a year earlier.

Excluding one-time items, the Issaquah, Washington-based company earned $2.69 per share, 15 cents above expectations.

The company’s total revenue rose about 7% to $47.50 billion, but fell short of estimates of $47.57 billion.

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