Costco cited
the returns, along
with
price
reductions on furniture, in reining in
its fou
rth-quarter
earnings outlook.
"Provided
the margin
and
[earnings]
drag
caused by
the
[previously]
lenient
policy,
the change is
a
positive
development
for
the stock and will
begin to
cap
margin
dilution
going
forward,"
Mr.
Grom wrote in
a
research note
distributed to
his firm's
clients
yesterday.
Mr. Grom
owns
no
Costco stock.
J.P.
Morgan
has done business with
Costco
in
the
past
year.
Costco
has
attempted other
methods
to stem
returns
and avoid
changing
its
return
policy.
!t introduced
an
800
number
that customers
can call
to
get
answers to technical
questions
about their
purchases.
lt
also began
offering
on a
limited
scale
a third-party service for installing high-definition
TVs in
homes.