Costco Wholesale Corporation Reports First Quarter Fiscal Year 2019 Operating Results
December 13 2018 - 4:15PM
Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq:
COST) today announced its operating results for the first quarter
(twelve weeks) of fiscal 2019, ended November 25, 2018.
Net sales for the first quarter were $34.31
billion, an increase of 10.3 percent from $31.12 billion during the
first quarter last year.
Comparable sales for the first quarter fiscal 2019
were as follows:
|
|
|
|
|
|
|
|
12 Weeks |
|
12
WeeksAdjusted* |
|
|
U.S. |
11.0% |
|
8.3% |
|
|
Canada |
2.4% |
|
5.5% |
|
|
Other
International |
4.0% |
|
5.8% |
|
|
|
|
|
|
|
|
Total Company |
8.8% |
|
7.5% |
|
|
|
|
|
|
|
|
E-commerce |
32.3% |
|
26.2% |
|
|
|
|
|
|
|
*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 quarter was $767 million, or
$1.73 per diluted share, compared to $640 million, or $1.45 per
diluted share, last year. This year’s first quarter benefited from
a $59 million ($0.13 per diluted share) tax benefit related to
stock-based compensation and a $27 million ($0.06 per diluted
share) tax benefit related to implementation of the 2017 Tax Act.
In addition, the quarter includes a charge of $43 million ($31
million after-tax, $0.07 per diluted share) for an adjustment to
our estimate of breakage on rewards earned prior to Fiscal Year
2019 for the Citi/Visa co-branded credit card program. Last year’s
first quarter benefited from a $41 million ($0.09 per diluted
share) tax benefit related to stock-based compensation.
Costco currently operates 768 warehouses,
including 533 in the United States and Puerto Rico, 100 in Canada,
39 in Mexico, 28 in the United Kingdom, 26 in Japan, 15 in Korea,
13 in Taiwan, 10 in Australia, two in Spain, one in Iceland, and
one in France. Costco also operates e-commerce 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, December 13, 2018, 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,” “may,” “might,” “likely,” “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
they are made, and the Company does not undertake to update these
statements, except as required by law.
CONTACTS: Costco Wholesale CorporationRichard
Galanti, 425/313-8203Bob Nelson, 425/313-8255David Sherwood,
425/313-8239
COSTCO WHOLESALE
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
INCOME (dollars in millions, except per share
data)(unaudited)
|
12 Weeks Ended |
|
November 25, 2018 |
|
November 26, 2017 |
REVENUE |
|
|
|
Net sales |
$ |
34,311 |
|
|
$ |
31,117 |
|
Membership fees |
758 |
|
|
692 |
|
Total
revenue |
35,069 |
|
|
31,809 |
|
OPERATING
EXPENSES |
|
|
|
Merchandise costs |
30,623 |
|
|
27,617 |
|
Selling,
general and administrative |
3,475 |
|
|
3,224 |
|
Preopening expenses |
22 |
|
|
17 |
|
Operating
income |
949 |
|
|
951 |
|
OTHER INCOME
(EXPENSE) |
|
|
|
Interest
expense |
(36 |
) |
|
(37 |
) |
Interest
income and other, net |
22 |
|
|
22 |
|
INCOME BEFORE
INCOME TAXES |
935 |
|
|
936 |
|
Provision
for income taxes |
158 |
|
|
285 |
|
Net
income including noncontrolling interests |
777 |
|
|
651 |
|
Net
income attributable to noncontrolling interests |
(10 |
) |
|
(11 |
) |
NET INCOME
ATTRIBUTABLE TO COSTCO |
$ |
767 |
|
|
$ |
640 |
|
|
|
|
|
NET INCOME PER
COMMON SHARE ATTRIBUTABLE TO COSTCO: |
|
|
|
Basic |
$ |
1.75 |
|
|
$ |
1.46 |
|
Diluted |
$ |
1.73 |
|
|
$ |
1.45 |
|
|
|
|
|
Shares used in
calculation (000’s): |
|
|
|
Basic |
439,157 |
|
|
437,965 |
|
Diluted |
442,749 |
|
|
440,851 |
|
|
|
|
|
|
|
|
|
CASH DIVIDENDS
DECLARED PER COMMON SHARE |
$ |
0.57 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
COSTCO WHOLESALE
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS (amounts in millions, except par value
and share data)(unaudited)
|
Subject to Reclassifications |
|
November 25, 2018 |
|
September 2, 2018 |
ASSETS |
|
|
|
CURRENT ASSETS |
|
|
|
Cash and cash
equivalents |
$ |
6,778 |
|
|
$ |
6,055 |
|
Short-term investments |
1,175 |
|
|
1,204 |
|
Receivables, net |
1,795 |
|
|
1,669 |
|
Merchandise inventories |
12,205 |
|
|
11,040 |
|
Other current assets |
1,001 |
|
|
321 |
|
Total current assets |
22,954 |
|
|
20,289 |
|
PROPERTY AND EQUIPMENT |
|
|
|
Land |
6,211 |
|
|
6,193 |
|
Buildings and improvements |
16,355 |
|
|
16,107 |
|
Equipment and fixtures |
7,448 |
|
|
7,274 |
|
Construction in progress |
1,130 |
|
|
1,140 |
|
|
31,144 |
|
|
30,714 |
|
Less accumulated depreciation and amortization |
(11,265 |
) |
|
(11,033 |
) |
Net property and equipment |
19,879 |
|
|
19,681 |
|
OTHER ASSETS |
981 |
|
|
860 |
|
TOTAL ASSETS |
$ |
43,814 |
|
|
$ |
40,830 |
|
LIABILITIES AND EQUITY |
|
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
$ |
13,133 |
|
|
$ |
11,237 |
|
Accrued salaries and benefits |
2,982 |
|
|
2,994 |
|
Accrued member rewards |
1,077 |
|
|
1,057 |
|
Deferred membership fees |
1,695 |
|
|
1,624 |
|
Other current liabilities |
3,586 |
|
|
3,014 |
|
Total current liabilities |
22,473 |
|
|
19,926 |
|
LONG-TERM DEBT, excluding current portion |
6,480 |
|
|
6,487 |
|
OTHER LIABILITIES |
1,382 |
|
|
1,314 |
|
Total liabilities |
30,335 |
|
|
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;
440,546,000 and |
|
|
|
|
|
438,189,000 shares issued and outstanding |
4 |
|
|
4 |
|
Additional paid-in capital |
6,107 |
|
|
6,107 |
|
Accumulated other comprehensive loss |
(1,331 |
) |
|
(1,199 |
) |
Retained earnings |
8,387 |
|
|
7,887 |
|
Total Costco stockholders’ equity |
13,167 |
|
|
12,799 |
|
Noncontrolling interests |
312 |
|
|
304 |
|
Total equity |
13,479 |
|
|
13,103 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
43,814 |
|
|
$ |
40,830 |
|
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