US retailer Stater Bros. has reported a drop in third-quarter profits as an increase in costs offset higher sales.

Stater Bros., which runs over 160 stores in California, booked net income of US$7.2m for the 13 weeks to 24 June. A year earlier, the retailer posted net income of $7.6m.

The retailer said its operating profit dipped from $24.4m a year ago to $23.5m.

An increase in operating expenses hit Stater Bros. profits as the retailer’s sales rose. Stater Bros. consolidated sales were up 1.1% at $949.8m. Like-store sales also increased 1.1%.