U.S. retailers Costco Wholesale Corp and Big Lots reported lower quarterly profit on Wednesday as cautious shoppers avoided splurging on discretionary items, like furniture or jewelry, and stuck to buying basics, like food.

Our quarterly results were hurt by the continued weakness in non-foods sales and related margins, said Costco Chief Financial Officer Richard Galanti in a statement. Margins in foods and non-foods were also negatively affected by increased pre-holiday seasonal markdowns and other selective price reductions to drive sales and increase market share.

Costco's profit was $239.7 million, or 55 cents per share, for its fiscal second quarter ended February 15, down from $327.9 million, or 74 cents per share, a year earlier.

Analysts, on average, expected earnings of 60 cents per share, according to Reuters Estimates.

Big Lots' net income was $78.77 million, or 96 cents per share, for the fiscal fourth-quarter ended January 31, down from $92.02 million, or $1.04 per share, a year earlier.

Income from continuing operations was $81.8 million, or $1.00 per share, compared with $85.6 million, or 97 cents per share, a year ago.

Analysts had been expecting it to earn 93 cents per share.


Costco's quarterly sales fell 1 percent to $16.49 billion, excluding membership fees, which increased about 4 percent to $355.6 million. Sales at clubs open at least a year, a key retail gauge known as same-store sales, fell 3 percent.

February same-store sales also fell 3 percent, worse than the 2.7 percent decline analysts were expecting.

Costco has said it would be aggressive in cutting prices or delaying price increases to retain its shoppers during the recession, though Wall Street analysts have said that strategy would hurt profits.

Last month, Costco warned that its second-quarter results would be substantially below the First Call consensus of 70 cents a share after it reduced prices to attract shoppers during the holiday season.

Meanwhile, Big Lots, which specializes in sales of excess inventory, said fourth-quarter net sales fell to $1.37 billion from $1.41 billion, while sales at its stores open at least two years, or same-store sale, fell 3.2 percent.

Big Lots has said that in the year-end holiday quarter, sales of discretionary items, like furniture and toys, were challenging and shoppers gravitated toward buying basics, like food or household cleaners.

For the full-year, Big Lots expects same-store sales to be in a range of flat to down 2 percent.

For the first quarter, it forecast earnings per share of 34 cents to 40 cents from continuing operations and full-year earnings per share of $1.75 to $1.90 from continuing operations.

Analysts, on average, had been expecting it to earn 35 cents for the first quarter and $1.70 for the full year.

(Reporting by Nicole Maestri; Editing by Derek Caney)