Oct. 10 (Bloomberg) -- Costco Wholesale Corp., the largest U.S. warehouse club, said fourth-quarter profit rose 4.7 percent as customers bought food and consumer electronics.

Net income for the quarter through Sept. 2 increased 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.

The average estimate of 20 analysts surveyed by Bloomberg was 83 cents a share. The company announced a one-time cost of $35.8 million related to a change in accounting procedure. Excluding the charge, earnings per share would have been 91 cents a share, Costco added.

Costco fell 40 cents to $63.31 yesterday in Nasdaq Stock Market trading. The shares have gained 20 percent this year.

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.

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 05:14 EDT