Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq:
COST) today announced its operating results for the third quarter
(12 weeks) and the first 36 weeks of fiscal 2020, ended May 10,
2020.
Net sales for the quarter increased 7.3 percent,
to $36.45 billion from $33.96 billion last year. Net sales for the
first 36 weeks increased 7.8 percent, to $110.94 billion from
$102.90 billion last year.
Comparable sales for the third quarter fiscal
2020 were as follows:
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|
|
|
|
|
|
|
|
|
|
|
12 Weeks |
|
12 Weeks |
|
36 Weeks |
|
36 Weeks |
|
|
|
|
|
Adjusted* |
|
|
|
Adjusted* |
|
|
U.S. |
5.9% |
|
8.0% |
|
6.6% |
|
7.1% |
|
|
Canada |
-2.5% |
|
3.0% |
|
3.1% |
|
5.0% |
|
|
Other International |
6.2% |
|
12.2% |
|
5.7% |
|
7.9% |
|
|
|
|
|
|
|
|
|
|
|
|
Total Company |
4.8% |
|
7.8% |
|
6.0% |
|
6.9% |
|
|
|
|
|
|
|
|
|
|
|
|
E-commerce |
64.5% |
|
66.1% |
|
31.8% |
|
32.3% |
|
|
|
|
|
|
|
|
|
|
|
*Excluding the impacts from changes in gasoline prices and
foreign exchange.
Reported net income for the third quarter was
$838 million, or $1.89 per share, which was negatively impacted by
$283 million pretax, or 47 cents per diluted share, from
incremental wage and sanitation costs related to COVID-19. Last
year's reported third quarter net income was $906 million, or $2.05
per diluted share, which included the benefit of a
non-recurring tax item of $73 million, or 16 cents per
share.
Net income for the first 36 weeks was $2.61
billion, or $5.89 per diluted share, compared to $2.56 billion, or
$5.79 per diluted share, last year.
Costco currently operates 787 warehouses,
including 547 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, 12 in Australia, two in Spain, and one each in
Iceland, France, and China. Costco also operates e-commerce sites
in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan,
Japan, and Australia.
A conference call to discuss these results is scheduled for 2:00
p.m. (PT) today, May 28, 2020, 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 maintain effective internal control over financial
reporting, COVID-19 related factors and challenges, including among
others, the duration of the pandemic, the unknown long-term
economic impacts, reduced customer shopping due to illness, travel
restrictions or financial hardship, shifts in demand away from
discretionary or higher-priced products, reduced workforce due to
illness, quarantine, or government mandates, temporary store
closures due to reduced workforces or government mandates, or
supply-chain disruptions, 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 they are made, and the Company
does not undertake to update these statements, 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)
|
12 Weeks Ended |
|
36 Weeks Ended |
|
May 10, 2020 |
|
May 12, 2019 |
|
May 10, 2020 |
|
May 12, 2019 |
REVENUE |
|
|
|
|
|
|
|
Net sales |
$ |
36,451 |
|
|
$ |
33,964 |
|
|
$ |
110,943 |
|
|
$ |
102,903 |
|
Membership fees |
815 |
|
|
776 |
|
|
2,435 |
|
|
2,302 |
|
Total revenue |
37,266 |
|
|
34,740 |
|
|
113,378 |
|
|
105,205 |
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
Merchandise costs |
32,249 |
|
|
30,233 |
|
|
98,538 |
|
|
91,576 |
|
Selling, general and administrative |
3,830 |
|
|
3,371 |
|
|
11,305 |
|
|
10,310 |
|
Preopening expenses |
8 |
|
|
14 |
|
|
29 |
|
|
45 |
|
Operating income |
1,179 |
|
|
1,122 |
|
|
3,506 |
|
|
3,274 |
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
Interest expense |
(37 |
) |
|
(35 |
) |
|
(109 |
) |
|
(105 |
) |
Interest income and other, net |
21 |
|
|
36 |
|
|
101 |
|
|
104 |
|
INCOME BEFORE INCOME
TAXES |
1,163 |
|
|
1,123 |
|
|
3,498 |
|
|
3,273 |
|
Provision for income taxes |
311 |
|
|
207 |
|
|
843 |
|
|
679 |
|
Net income including noncontrolling interests |
852 |
|
|
916 |
|
|
2,655 |
|
|
2,594 |
|
Net income attributable to noncontrolling interests |
(14 |
) |
|
(10 |
) |
|
(42 |
) |
|
(32 |
) |
NET INCOME
ATTRIBUTABLE TO COSTCO |
$ |
838 |
|
|
$ |
906 |
|
|
$ |
2,613 |
|
|
$ |
2,562 |
|
|
|
|
|
|
|
|
|
NET INCOME PER COMMON
SHARE ATTRIBUTABLE TO COSTCO: |
|
|
|
|
|
|
|
Basic |
$ |
1.90 |
|
|
$ |
2.06 |
|
|
$ |
5.91 |
|
|
$ |
5.83 |
|
Diluted |
$ |
1.89 |
|
|
$ |
2.05 |
|
|
$ |
5.89 |
|
|
$ |
5.79 |
|
|
|
|
|
|
|
|
|
Shares used in calculation
(000’s): |
|
|
|
|
|
|
|
Basic |
442,322 |
|
|
439,859 |
|
|
442,054 |
|
|
439,767 |
|
Diluted |
443,855 |
|
|
442,642 |
|
|
443,754 |
|
|
442,565 |
|
|
|
|
|
|
|
|
|
COSTCO WHOLESALE
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS (amounts in millions, except par value
and share data) (unaudited)
Subject to
Reclassification |
May 10, 2020 |
|
September 1, 2019 |
|
ASSETS |
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
Cash and cash equivalents |
$ |
10,826 |
|
|
$ |
8,384 |
|
|
Short-term investments |
948 |
|
|
1,060 |
|
|
Receivables, net |
1,507 |
|
|
1,535 |
|
|
Merchandise inventories |
11,010 |
|
|
11,395 |
|
|
Other current assets |
963 |
|
|
1,111 |
|
|
Total current assets |
25,254 |
|
|
23,485 |
|
|
PROPERTY
AND EQUIPMENT |
|
|
|
|
Land |
6,684 |
|
|
6,417 |
|
|
Buildings and improvements |
17,800 |
|
|
17,136 |
|
|
Equipment and fixtures |
8,549 |
|
|
7,801 |
|
|
Construction in progress |
1,073 |
|
|
1,272 |
|
|
Accumulated depreciation and amortization |
(12,579 |
) |
|
(11,736 |
) |
|
Net property and equipment |
21,527 |
|
|
20,890 |
|
|
OTHER
ASSETS |
|
|
|
|
Operating lease right-of-use assets |
2,749 |
|
|
— |
|
|
Other long-term assets |
2,202 |
|
|
1,025 |
|
|
TOTAL ASSETS |
$ |
51,732 |
|
|
$ |
45,400 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
Accounts payable |
$ |
10,813 |
|
|
$ |
11,679 |
|
|
Accrued salaries and benefits |
3,246 |
|
|
3,176 |
|
|
Accrued member rewards |
1,331 |
|
|
1,180 |
|
|
Deferred membership fees |
1,832 |
|
|
1,711 |
|
|
Current portion of long-term debt |
1,497 |
|
|
1,699 |
|
|
Other current liabilities |
4,060 |
|
|
3,792 |
|
|
Total current liabilities |
22,779 |
|
|
23,237 |
|
|
OTHER
LIABILITIES |
|
|
|
|
Long-term debt, excluding current portion |
7,598 |
|
|
5,124 |
|
|
Long-term operating lease liabilities |
2,535 |
|
|
— |
|
|
Other long-term liabilities |
1,617 |
|
|
1,455 |
|
|
TOTAL LIABILITIES |
34,529 |
|
|
29,816 |
|
|
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;
441,523,000 and 439,625,000 shares issued and outstanding |
4 |
|
|
4 |
|
|
Additional paid-in capital |
6,593 |
|
|
6,417 |
|
|
Accumulated other comprehensive loss |
(1,678 |
) |
|
(1,436 |
) |
|
Retained earnings |
11,883 |
|
|
10,258 |
|
|
Total Costco stockholders’ equity |
16,802 |
|
|
15,243 |
|
|
Noncontrolling interests |
401 |
|
|
341 |
|
|
TOTAL EQUITY |
17,203 |
|
|
15,584 |
|
|
TOTAL LIABILITIES AND EQUITY |
$ |
51,732 |
|
|
$ |
45,400 |
|
|
|
|
|
|
|
|
|
|
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