Costco (COST) Sinks On Lower Gudiance

Shares of warehouse club Costco Wholesale (NASDAQ: COST) are under pressure this morning after the company reported that January comparable sales fell 2%, or 0% in the U.S. and 9% internationally, and lowered guidance.

Costo said earnings per share for the second quarter are expected to be "substantially" below the current First Call consensus earnings per share estimate of $0.70.

CFO Richard Galanti sai,d, "General economic conditions have negatively affected our sales, primarily in non-foods, and merchandise margins. Our margins have also been impacted by aggressive merchandise pricing in our core merchandise business to drive sales and increase market share, particularly during the first four weeks of the fiscal quarter. To a lesser extent, we are also being adversely affected by lower year-over-year profits associated with our gasoline business; and international profits have been hurt as a result of the strengthening U.S. dollar. Given the uncertainties surrounding the economy, including consumer behavior, we will not be providing earnings guidance for the remainder of this fiscal year."

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