Oct. 10 (Bloomberg) -- Costco Wholesale Corp., the largest U.S. warehouse club, reported fourth-quarter profit that rose more than analysts estimated as customers bought food and consumer electronics.

Net income for the quarter through Sept. 2 increased 4.7 percent to $372.4 million, or 83 cents a share, from $355.6 million, or 75 cents a share, a year earlier, the Issaquah, Washington-based company said today in a statement. Net revenue rose 2.9 percent to $20.1 billion, the retailer said last month.

Costco shoppers, who might pick up a $1,270 strand of cultured pearls while buying cases of seltzer, spent more even as costs for housing, fuel and food rose. Customers also purchased iPods, digital cameras and prepared food.

``The thing that Costco has going for them is that they tend to get a little bit more upscale customers,'' Rachel Wakefield, who helps manage $1.2 billion for Coldstream Capital Management, including Costco shares, said Oct. 1.

Costco had a cost of $35.8 million for an accounting change related to membership fees. Excluding that, per-share profit would have been 91 cents a share, it said. The average estimate of 20 analysts surveyed by Bloomberg was 83 cents.

Costco gained 89 cents, or 1.4 percent, to $64.20 as of 7:38 a.m. in New York. The shares gained 20 percent this year before today.

Retailers including Lowe's Cos., Bed Bath & Beyond Inc. and Target Corp. have cut sales or earnings forecasts as consumers coped with higher food, fuel and housing costs. The average price of a gallon of milk, for example, jumped 18 percent from January to September, the U.S. Agriculture Department said.

Housing Concern

Charles Grom, an analyst at J.P. Morgan Securities Inc., wrote in a report Oct. 3 that Costco store managers at 10 out of 14 stores in California visited last month cited housing as a concern among customers, particularly in less affluent areas. Grom said it's ``something we are watching closely.''

Grom, based in New York, rates Costco shares ``overweight.'' He estimates that about 35 percent of the retailer's sales come from its California locations.

The company's shoppers pay an annual membership fee to browse for bargain-priced basics along with luxury and designer items such as $230 Christian Dior sunglasses.

Sales at stores open at least a year rose 4 percent at U.S. outlets and 9 percent at international stores during the quarter, for a total company gain of 5 percent, Costco said Sept. 5.

At Sam's Club, the warehouse-club unit of Wal-Mart Stores Inc., same-store sales at its U.S. locations gained 6.5 percent for the quarter ended July 31. Totals for both companies include gasoline sales. Wal-Mart is the world's largest retailer.

Costco operates 520 warehouses in North America, Asia and the U.K., including 385 units in the United States.

To contact the reporters on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net; Thomas Mulier in Geneva at tmulier@bloomberg.net.

Last Updated: October 10, 2007 07:54 EDT