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Costco Q4 net income surpasses expectations

Costco Wholesale Corp.'s fiscal fourth-quarter net income and earnings per share beat analysts' expectations, while same-store sales rose 6.1% in the quarter, the company reported Oct. 5.

The Issaquah, Wash.-based company said net income attributable to Costco for the 17 weeks ended Sept. 3 was $919 million, higher than both the mean consensus estimate of $892.7 million compiled by S&P Capital IQ and the $779 million the company reported for the same quarter in 2016. Operating income for the company's third quarter was $1.45 billion, above both the mean consensus estimate of $1.40 billion according to Capital IQ and the $1.19 billion from the same period one year ago.

Diluted earnings per share were $2.08, beating the S&P Capital IQ consensus estimate for GAAP EPS of $2.02.

Total revenue for the quarter was $42.30 billion, above both the mean consensus estimate of $41.55 billion compiled by Capital IQ and the year-ago result of $36.56 billion. The comparable quarter in 2016 was shorter by one week.

Including the impacts of foreign exchange and gasoline prices, same-store sales rose 6.1% for the quarter, just above the 5.55% consensus mean estimate compiled by S&P Capital IQ.

The company also reported same-store sales growth for the five weeks of September of 6.2%. That period includes sales made after e-commerce giant Amazon.com Inc. cut prices on some grocery items at Whole Foods Market Inc. on Aug. 28.

Costco's total revenue for fiscal 2017, which ended Sept. 3, was $129.03 billion, beating both the consensus estimate of $128.23 billion compiled by Capital IQ and the $118.72 billion Costco reported for its 2016 fiscal year.

Net income for the year was $2.68 billion, higher than both the consensus estimate of $2.54 billion, according to Capital IQ, and the $2.35 billion the retailer reported for the previous fiscal year. That figure included a tax benefit of $82 million that the company booked during its fiscal third quarter.

Same-store sales growth for the year was 4.1%, narrowly beating the consensus estimate of 3.7% and well above the flat same-store sales growth the company reported in 2016.

Diluted earnings per share for 2017 were $6.08, above both the Capital IQ estimate for GAAP EPS of $5.98 and more than the EPS of $5.33 that Costco reported for its 2016 fiscal year.