Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq:
COST) today announced its operating results for the 16-week fourth
quarter and the 52-week fiscal year, ended September 1, 2019.
Net sales for the quarter were $46.45 billion,
an increase of 7.0 percent from $43.41 billion during the similar
period last year. Net sales for the fiscal year were $149.35
billion, an increase of 7.9 percent from $138.43 billion during the
similar period last year.
Comparable sales for the fourth quarter and the
fiscal year were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
16 Weeks |
|
16 Weeks |
|
52 Weeks |
|
52 Weeks |
|
|
|
|
|
Adjusted* |
|
|
|
Adjusted* |
|
|
U.S. |
6.2% |
|
5.2% |
|
7.8% |
|
6.4% |
|
|
Canada |
2.6% |
|
4.7% |
|
1.6% |
|
5.3% |
|
|
Other International |
1.9% |
|
5.0% |
|
2.0% |
|
5.6% |
|
|
|
|
|
|
|
|
|
|
|
|
Total Company |
5.1% |
|
5.1% |
|
6.1% |
|
6.1% |
|
|
|
|
|
|
|
|
|
|
|
|
E-commerce |
19.8% |
|
21.9% |
|
23.1% |
|
23.3% |
|
|
|
|
|
|
|
|
|
|
|
*Excluding the impacts from changes in gasoline prices, foreign
exchange, and a previously disclosed accounting change concerning
revenue recognition (ASC 606).
Net income for the fourth quarter was $1,097
million, or $2.47 per diluted share, compared to $1,043 million, or
$2.36 per diluted share, last year. This year’s fourth
quarter was negatively impacted by a $123 million pre-tax reserve
to SG&A ($96 million after-tax), or 22 cents per diluted share,
related to a product tax assessment.
Net income for the fiscal year was $3.66
billion, or $8.26 per diluted share, compared to $3.13 billion, or
$7.09 per diluted share, in the prior year. As previously disclosed
and mentioned above, this year's net income was impacted by a net
benefit of $30 million or $0.07 per diluted share from primarily
non-recurring items. Last year was positively impacted by a
first quarter tax benefit of $41 million or $0.09 per diluted
share.
Costco currently operates 783 warehouses,
including 544 in the United States and Puerto Rico, 100 in Canada,
39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in Korea,
13 in Taiwan, 11 in Australia, two in Spain, one in France, one in
Iceland, and one in China. Costco also operates e-commerce web
sites in the U.S., Canada, the United Kingdom, Mexico, Korea and
Taiwan.
A conference call to discuss these results is scheduled for 2:00
p.m. (PT) today, October 3, 2019, and is available via a webcast on
www.costco.com (click on Investor Relations and “Play
Webcast”).
Certain statements contained in this document
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. For these
purposes, forward-looking statements are statements that address
activities, events, conditions or developments that the Company
expects or anticipates may occur in the future. In some cases
forward-looking statements can be identified because they contain
words such as “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,”
“potential,” “predict,” “project,” “seek,” “should,” “target,”
“will,” “would,” or similar expressions and the negatives of those
terms. Such forward-looking statements involve risks and
uncertainties that may cause actual events, results or performance
to differ materially from those indicated by such statements. These
risks and uncertainties include, but are not limited to, domestic
and international economic conditions, including exchange rates,
the effects of competition and regulation, uncertainties in the
financial markets, consumer and small business spending patterns
and debt levels, breaches of security or privacy of member or
business information, conditions affecting the acquisition,
development, ownership or use of real estate, capital spending,
actions of vendors, rising costs associated with employees
(generally including health care costs), energy and certain
commodities, geopolitical conditions (including tariffs), the
ability to remediate material weaknesses in internal control, and
other risks identified from time to time in the Company’s public
statements and reports filed with the Securities and Exchange
Commission. Forward-looking statements speak only as of the date
that they are made, and the Company does not undertake to update
them, except as required by law.
CONTACTS: Costco Wholesale Corporation Richard
Galanti, 425/313-8203 Bob Nelson, 425/313-8255 David Sherwood,
425/313-8239 Josh Dahmen, 425/313-8254
COSTCO WHOLESALE
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
INCOME (dollars in millions, except per share
data)(unaudited)
|
16 Weeks Ended |
|
52 Weeks Ended |
|
September 1, 2019 |
|
September 2, 2018 |
|
September 1, 2019 |
|
September 2, 2018 |
REVENUE |
|
|
|
|
|
|
|
Net sales |
$ |
46,448 |
|
|
$ |
43,414 |
|
|
$ |
149,351 |
|
|
$ |
138,434 |
|
Membership fees |
1,050 |
|
|
997 |
|
|
3,352 |
|
|
3,142 |
|
Total revenue |
47,498 |
|
|
44,411 |
|
|
152,703 |
|
|
141,576 |
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
Merchandise costs |
41,310 |
|
|
38,671 |
|
|
132,886 |
|
|
123,152 |
|
Selling, general and administrative |
4,684 |
|
|
4,263 |
|
|
14,994 |
|
|
13,876 |
|
Preopening expenses |
41 |
|
|
31 |
|
|
86 |
|
|
68 |
|
Operating income |
1,463 |
|
|
1,446 |
|
|
4,737 |
|
|
4,480 |
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
Interest expense |
(45 |
) |
|
(48 |
) |
|
(150 |
) |
|
(159 |
) |
Interest income and other, net |
74 |
|
|
51 |
|
|
178 |
|
|
121 |
|
INCOME BEFORE INCOME
TAXES |
1,492 |
|
|
1,449 |
|
|
4,765 |
|
|
4,442 |
|
Provision for income taxes |
382 |
|
|
396 |
|
|
1,061 |
|
|
1,263 |
|
Net income including noncontrolling interests |
1,110 |
|
|
1,053 |
|
|
3,704 |
|
|
3,179 |
|
Net income attributable to noncontrolling interests |
(13 |
) |
|
(10 |
) |
|
(45 |
) |
|
(45 |
) |
NET INCOME
ATTRIBUTABLE TO COSTCO |
$ |
1,097 |
|
|
$ |
1,043 |
|
|
$ |
3,659 |
|
|
$ |
3,134 |
|
|
|
|
|
|
|
|
|
NET INCOME PER COMMON
SHARE ATTRIBUTABLE TO COSTCO: |
|
|
|
|
|
|
|
Basic |
$ |
2.49 |
|
|
$ |
2.38 |
|
|
$ |
8.32 |
|
|
$ |
7.15 |
|
Diluted |
$ |
2.47 |
|
|
$ |
2.36 |
|
|
$ |
8.26 |
|
|
$ |
7.09 |
|
|
|
|
|
|
|
|
|
Shares used in calculation
(000’s): |
|
|
|
|
|
|
|
Basic |
439,727 |
|
|
438,379 |
|
|
439,755 |
|
|
438,515 |
|
Diluted |
443,400 |
|
|
442,427 |
|
|
442,923 |
|
|
441,834 |
|
|
|
|
|
|
|
|
|
COSTCO WHOLESALE
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS (amounts in millions, except par value
and share data)(unaudited)
Subject to
Reclassifications
|
|
|
September 1, 2019 |
|
September 2, 2018 |
ASSETS |
|
|
|
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
$ |
8,384 |
|
|
$ |
6,055 |
|
Short-term investments |
1,060 |
|
|
1,204 |
|
Receivables, net |
1,535 |
|
|
1,669 |
|
Merchandise inventories |
11,395 |
|
|
11,040 |
|
Other current assets |
1,111 |
|
|
321 |
|
Total current assets |
23,485 |
|
|
20,289 |
|
PROPERTY AND EQUIPMENT |
|
|
|
Land |
6,417 |
|
|
6,193 |
|
Buildings and improvements |
17,136 |
|
|
16,107 |
|
Equipment and fixtures |
7,801 |
|
|
7,274 |
|
Construction in progress |
1,272 |
|
|
1,140 |
|
|
32,626 |
|
|
30,714 |
|
Less accumulated depreciation and amortization |
(11,736 |
) |
|
(11,033 |
) |
Net property and equipment |
20,890 |
|
|
19,681 |
|
OTHER ASSETS |
1,025 |
|
|
860 |
|
TOTAL ASSETS |
$ |
45,400 |
|
|
$ |
40,830 |
|
LIABILITIES
AND EQUITY |
|
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
$ |
11,679 |
|
|
$ |
11,237 |
|
Accrued salaries and benefits |
3,176 |
|
|
2,994 |
|
Accrued member rewards |
1,180 |
|
|
1,057 |
|
Deferred membership fees |
1,711 |
|
|
1,624 |
|
Current portion of long-term debt |
1,699 |
|
|
90 |
|
Other current liabilities |
3,792 |
|
|
2,924 |
|
Total current liabilities |
23,237 |
|
|
19,926 |
|
LONG-TERM DEBT, excluding current
portion |
5,124 |
|
|
6,487 |
|
OTHER LIABILITIES |
1,455 |
|
|
1,314 |
|
Total liabilities |
29,816 |
|
|
27,727 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
EQUITY |
|
|
|
Preferred stock $0.01 par value; 100,000,000 shares authorized; no
shares issued and outstanding |
— |
|
|
— |
|
Common stock $0.01 par value; 900,000,000 shares authorized;
439,625,000 and 438,189,000 shares issued and outstanding |
4 |
|
|
4 |
|
Additional paid-in capital |
6,417 |
|
|
6,107 |
|
Accumulated other comprehensive loss |
(1,436 |
) |
|
(1,199 |
) |
Retained earnings |
10,258 |
|
|
7,887 |
|
Total Costco stockholders’ equity |
15,243 |
|
|
12,799 |
|
Noncontrolling interests |
341 |
|
|
304 |
|
Total equity |
15,584 |
|
|
13,103 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
45,400 |
|
|
$ |
40,830 |
|
|
|
|
|
|
|
|
|
|
|
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