Costco Wholesale Corporation Reports First Quarter Fiscal Year 2020 Operating Results
December 12 2019 - 4:15PM
Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq:
COST) today announced its operating results for the first quarter
(twelve weeks) of fiscal 2020, ended November 24, 2019.
Net sales for the first quarter were $36.24
billion, an increase of 5.6 percent from $34.31 billion last
year.
Comparable sales for the first quarter fiscal
2020 were as follows:
|
|
12 Weeks |
|
12 Weeks |
|
|
|
|
|
Adjusted* |
|
|
U.S. |
4.7% |
|
5.0% |
|
|
Canada |
2.9% |
|
5.1% |
|
|
Other International |
3.2% |
|
4.5% |
|
|
|
|
|
|
|
|
Total Company |
4.3% |
|
5.0% |
|
|
|
|
|
|
|
|
E-commerce |
5.5% |
|
5.7% |
|
*Excluding the impacts from changes in gasoline prices and
foreign exchange.
Total and comparable sales were negatively
impacted by approximately one-half percent due to Thanksgiving
occurring a week later this year. E-commerce sales in the quarter
were negatively impacted by an estimated 12 percentage points.
Net income for the quarter was $844 million, or
$1.90 per diluted share, compared to $767 million, or $1.73 per
diluted share, last year. This year’s first quarter reflects a $77
million ($0.17 per diluted share) tax benefit related to
stock-based compensation, compared to a $59 million ($0.13 per
diluted share) similar benefit last year.
Costco currently operates 785 warehouses,
including 546 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, 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, and
Japan.
A conference call to discuss these results is scheduled for 2:00
p.m. (PT) today, December 12, 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 maintain effective internal control over financial
reporting, 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 |
|
|
|
|
|
|
|
November 24, 2019 |
|
November 25, 2018 |
|
REVENUE |
|
|
|
|
|
|
|
|
Net sales |
$ |
36,236 |
|
|
$ |
34,311 |
|
|
Membership fees |
|
804 |
|
|
|
758 |
|
|
Total revenue |
$ |
37,040 |
|
|
|
35,069 |
|
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
Merchandise costs |
|
32,233 |
|
|
|
30,623 |
|
|
Selling, general and administrative |
|
3,732 |
|
|
|
3,475 |
|
|
Preopening expenses |
|
14 |
|
|
|
22 |
|
|
Operating income |
|
1,061 |
|
|
|
949 |
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
Interest expense |
|
(38 |
) |
|
|
(36 |
) |
|
Interest income and other, net |
|
35 |
|
|
|
22 |
|
|
INCOME BEFORE INCOME
TAXES |
|
1,058 |
|
|
|
935 |
|
|
Provision for income taxes |
|
202 |
|
|
|
158 |
|
|
Net income including noncontrolling interests |
|
856 |
|
|
|
777 |
|
|
Net income attributable to noncontrolling interests |
|
(12 |
) |
|
|
(10 |
) |
|
NET INCOME
ATTRIBUTABLE TO COSTCO |
$ |
844 |
|
|
$ |
767 |
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER COMMON
SHARE ATTRIBUTABLE TO COSTCO: |
|
|
|
|
|
|
|
|
Basic |
$ |
1.91 |
|
|
$ |
1.75 |
|
|
Diluted |
$ |
1.90 |
|
|
$ |
1.73 |
|
|
|
|
|
|
|
|
|
|
|
Shares used in calculation
(000’s): |
|
|
|
|
|
|
|
|
Basic |
|
441,818 |
|
|
|
439,157 |
|
|
Diluted |
|
443,680 |
|
|
|
442,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTCO WHOLESALE CORPORATIONCONDENSED
CONSOLIDATED BALANCE SHEETS(amounts in millions,
except par value and share data) (unaudited) |
|
|
|
|
|
|
Subject to Reclassification |
November 24, 2019 |
|
September 1, 2019 |
|
ASSETS |
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
Cash and cash equivalents |
$ |
9,027 |
|
|
$ |
8,384 |
|
|
Short-term investments |
993 |
|
|
1,060 |
|
|
Receivables, net |
1,711 |
|
|
1,535 |
|
|
Merchandise inventories |
13,818 |
|
|
11,395 |
|
|
Other current assets |
1,094 |
|
|
1,111 |
|
|
Total current assets |
26,643 |
|
|
23,485 |
|
|
PROPERTY AND
EQUIPMENT |
|
|
|
|
Land |
6,533 |
|
|
6,417 |
|
|
Buildings and improvements |
17,712 |
|
|
17,136 |
|
|
Equipment and fixtures |
8,243 |
|
|
7,801 |
|
|
Construction in progress |
803 |
|
|
1,272 |
|
|
Accumulated depreciation and amortization |
(12,054 |
) |
|
(11,736 |
) |
|
Net property and equipment |
21,237 |
|
|
20,890 |
|
|
OTHER
ASSETS |
|
|
|
|
Operating lease right-of-use assets |
2,508 |
|
|
— |
|
|
Other long-term assets |
954 |
|
|
1,025 |
|
|
TOTAL ASSETS |
$ |
51,342 |
|
|
$ |
45,400 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
Accounts payable |
$ |
14,440 |
|
|
$ |
11,679 |
|
|
Accrued salaries and benefits |
3,159 |
|
|
3,176 |
|
|
Accrued member rewards |
1,193 |
|
|
1,180 |
|
|
Deferred membership fees |
1,817 |
|
|
1,711 |
|
|
Current portion of long-term debt |
1,700 |
|
|
1,699 |
|
|
Other current liabilities |
3,956 |
|
|
3,792 |
|
|
Total current liabilities |
26,265 |
|
|
23,237 |
|
|
LONG-TERM
LIABILITIES |
|
|
|
|
Long-term debt, excluding current portion |
5,107 |
|
|
5,124 |
|
|
Long-term operating lease liabilities |
2,353 |
|
|
— |
|
|
Other long-term liabilities |
1,393 |
|
|
1,455 |
|
|
TOTAL LIABILITIES |
35,118 |
|
|
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;
441,778,000 and 439,625,000 shares issued and outstanding |
4 |
|
|
4 |
|
|
Additional paid-in capital |
6,391 |
|
|
6,417 |
|
|
Accumulated other comprehensive loss |
(1,321 |
) |
|
(1,436 |
) |
|
Retained earnings |
10,787 |
|
|
10,258 |
|
|
Total Costco stockholders’ equity |
15,861 |
|
|
15,243 |
|
|
Noncontrolling interests |
363 |
|
|
341 |
|
|
TOTAL EQUITY |
16,224 |
|
|
15,584 |
|
|
TOTAL LIABILITIES AND EQUITY |
$ |
51,342 |
|
|
$ |
45,400 |
|
|
|
|
|
|
|
|
|
|
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