Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2019 Operating Results

Date : 10/03/2019 @ 8:15PM
Source : GlobeNewswire Inc.
Stock : Costco Wholesale Corporation (COST)
Quote : 303.66  -0.93 (-0.31%) @ 4:59AM
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Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2019 Operating Results

Costco Wholesale (NASDAQ:COST)
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2 Months : From Sep 2019 to Nov 2019

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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% 
 Canada2.6% 4.7% 1.6% 5.3% 
 Other International1.9% 5.0% 2.0% 5.6% 
          
 Total Company5.1% 5.1% 6.1% 6.1% 
          
 E-commerce19.8% 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 fees1,050  997  3,352  3,142 
Total revenue47,498  44,411  152,703  141,576 
OPERATING EXPENSES       
Merchandise costs41,310  38,671  132,886  123,152 
Selling, general and administrative4,684  4,263  14,994  13,876 
Preopening expenses41  31  86  68 
Operating income1,463  1,446  4,737  4,480 
OTHER INCOME (EXPENSE)       
Interest expense(45) (48) (150) (159)
Interest income and other, net74  51  178  121 
INCOME BEFORE INCOME TAXES1,492  1,449  4,765  4,442 
Provision for income taxes382  396  1,061  1,263 
Net income including noncontrolling interests1,110  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):       
Basic439,727  438,379  439,755  438,515 
Diluted443,400  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 investments1,060  1,204 
Receivables, net1,535  1,669 
Merchandise inventories11,395  11,040 
Other current assets1,111  321 
Total current assets23,485  20,289 
PROPERTY AND EQUIPMENT   
Land6,417  6,193 
Buildings and improvements17,136  16,107 
Equipment and fixtures7,801  7,274 
Construction in progress1,272  1,140 
 32,626  30,714 
Less accumulated depreciation and amortization(11,736) (11,033)
Net property and equipment20,890  19,681 
OTHER ASSETS1,025  860 
TOTAL ASSETS$45,400  $40,830 
LIABILITIES AND EQUITY   
CURRENT LIABILITIES   
Accounts payable$11,679  $11,237 
Accrued salaries and benefits3,176  2,994 
Accrued member rewards1,180  1,057 
Deferred membership fees1,711  1,624 
Current portion of long-term debt1,699  90 
Other current liabilities3,792  2,924 
Total current liabilities23,237  19,926 
LONG-TERM DEBT, excluding current portion5,124  6,487 
OTHER LIABILITIES1,455  1,314 
Total liabilities29,816  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 outstanding4  4 
Additional paid-in capital6,417  6,107 
Accumulated other comprehensive loss(1,436) (1,199)
Retained earnings10,258  7,887 
Total Costco stockholders’ equity15,243  12,799 
Noncontrolling interests341  304 
Total equity15,584  13,103 
TOTAL LIABILITIES AND EQUITY$45,400  $40,830 
          

 

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