By Nicole Maestri

Warehouse clubs like Costco had been seen as a relative safe heaven amid a beaten-down U.S. retail sector as shoppers seek out their discounted prices on food and toiletries. But Costco's results showed that its business is not immune from a year-long U.S. recession that has crimped spending among even its higher-income shoppers.

Analysts also said the boost Costco received from its gas business in the latest quarter was expected to be temporary.

"It's unlikely that they will see this sort of positive performance in future quarters," said Neil Currie, a retail analyst with UBS. But Currie, who has a neutral rating on Costco's shares, said Costco's profit performance was "impressive."

Shares fell 3.4 percent to $51.84 in late morning trading.

Net income rose to $262.5 million, or 60 cents per share, for the fiscal first quarter ended November 23, from $262 million, or 59 cents per share, a year earlier.

Excluding a charge for accounting adjustments on insurance contracts and an impairment of corporate investments, earnings were 65 cents per share, compared with analysts' view of 62 cents, according to Reuters Estimates.

Quarterly sales rose almost 4 percent to $16.04 billion, excluding membership fees, which increased 6 percent to $358.7 million. Sales at its clubs open at least a year, a key retail gauge known as same-store sales, increased 1 percent.

GAS STATIONS A PROFIT DRIVER

Costco is the largest U.S. warehouse club operator, competing with Wal-Mart Stores Inc's Sam's Club and BJ's Wholesale Club .

It has won customers by offering unexpected items, like Burberry handbags, alongside typical warehouse club goods, such as bulk-sized packages of napkins and crates of fresh fruit. As a U.S. recession has squeezed budgets, customers have come to its clubs for low prices on food.

But its business has slowed in recent months as shoppers avoid splurging on unnecessary items, like jewelry and clothes, and a strong U.S. dollar cuts the value of its international sales.

Costco, with 550 warehouses worldwide, operates stores in international markets like Canada, the United Kingdom, Japan and Mexico. It said its first quarter earnings were hurt by roughly 3 cents per share as the stronger the U.S. dollar reduced the value of foreign revenues when after they were converted into greenbacks.

Meanwhile, it got a lift from falling gas prices, which boosted profitability at the gas stations it operates at its clubs. In its latest quarter the average price for gasoline fell from roughly $3.68 a gallon to about $1.89, according to the Energy Information Administration.

Costco replenishes its gas supplies on a daily basis, compared with traditional stations that turn inventory weekly. When prices fall, Costco can sell gas purchased at the current cheaper price, helping margins, while competitors are selling supplies bought when prices were higher.

(Reporting by Nicole Maestri; Editing by Derek Caney, Dave Zimmerman)