Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 7, 2024

COSTCO WHOLESALE CORPORATION

(Exact name of registrant as specified in its charter)

Washington

0-20355

91-1223280

(State or other jurisdiction
of incorporation)

(Commission
File No.)

(I.R.S. Employer
Identification No.)

999 Lake Drive

Issaquah, WA 98027

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: 425-313-8100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.005 per share

COST

NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On March 7, 2024, the Company issued a press release containing its operating results for the second quarter (twelve weeks) and the first 24 weeks of fiscal 2024, ended February 18, 2024, and sales results for the four weeks ended March 3, 2024. A copy of the press release is attached as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

99.1. Press release dated March 7, 2024.

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	COSTCO WHOLESALE CORPORATION

Dated: March 7, 2024	By:	/s/ Richard A. Galanti
		Richard A. Galanti
		Executive Vice President, Chief Financial Officer and Director

Exhibit 99.1

Press Release

COSTCO WHOLESALE CORPORATION REPORTS SECOND QUARTER AND YEAR-TO-DATE OPERATING RESULTS FOR FISCAL 2024 AND FEBRUARY SALES RESULTS

ISSAQUAH, Wash., March 7, 2024 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the second quarter (twelve weeks) and the first 24 weeks of fiscal 2024, ended February 18, 2024.

Net sales for the quarter increased 5.7 percent, to $57.33 billion, from $54.24 billion last year. Net sales for the first 24 weeks increased 5.9 percent, to $114.05 billion, from $107.68 billion last year.

Net sales for the Company were negatively impacted by approximately one and one-half percent for the quarter and by approximately one-half percent for the first 24 weeks of fiscal 2024 from the shift of the fiscal calendar, as a result of the fifty-third week last year.

The following comparable sales data reflect comparable locations year-over-year and comparable retail weeks.

Comparable sales for the second quarter and first 24 weeks of fiscal 2024 were as follows:


	12 Weeks	12 Weeks	24 Weeks	24 Weeks
		Adjusted*		Adjusted*
U.S.	4.3%	4.8%	3.1%	3.7%
Canada	9.2%	9.0%	7.8%	8.6%
Other International	8.6%	8.2%	9.8%	7.7%
Total Company	5.6%	5.8%	4.7%	4.8%
E-commerce	18.4%	18.2%	12.2%	12.0%

*Excluding the impacts from changes in gasoline prices and foreign exchange.

Net income for the quarter was $1,743 million, $3.92 per diluted share, compared to $1,466 million, $3.30 per diluted share, last year. This year's second quarter net income was positively impacted by a $94 million ($0.21 per diluted share) tax benefit due to the deductibility of the $15 per share special dividend to the extent received by 401(k) plan participants. Net income for the first 24 weeks was $3.33 billion, $7.49 per diluted share, compared to $2.83 billion, $6.37 per diluted share, last year.

For the four-week reporting month of February, ended March 3, 2024, the Company reported net sales of $18.21 billion, an increase of 6.9 percent from $17.04 billion last year. Net sales for the first 26 weeks were $123.15 billion, an increase of 6.1 percent from $116.06 billion last year.

Press Release

Comparable sales for the periods ended March 3, 2024, were as follows:


	4 Weeks	4 Weeks	26 Weeks	26 Weeks
		Adjusted*		Adjusted*
U.S.	3.4%	4.1%	3.2%	3.8%
Canada	8.4%	8.3%	7.9%	8.7%
Other International	10.2%	11.3%	9.8%	7.8%
Total Company	5.0%	5.6%	4.7%	4.9%
E-commerce	16.2%	16.0%	12.6%	12.4%

*Excluding the impacts from changes in gasoline prices and foreign exchange.

Costco currently operates 875 warehouses, including 603 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 33 in Japan, 29 in the United Kingdom, 18 in Korea, 15 in Australia, 14 in Taiwan, six in China, four in Spain, two in France, and one each in Iceland, New Zealand and Sweden. 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, March 7, 2024, and is available via a webcast on investor.costco.com (click on "Events & Presentations”).

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, inflation or deflation, 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 and the Ukraine conflict), the ability to maintain effective internal control over financial reporting, regulatory and other impacts related to climate change, public-health related factors, 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. Comparable sales and comparable sales excluding impacts from changes in gasoline prices and foreign exchange are intended as supplemental information and are not a substitute for net sales presented in accordance with GAAP.

CONTACTS: Costco Wholesale Corporation

David Sherwood, 425/313-8239

Josh Dahmen, 425/313-8254

Andrew Yoon, 425/313-6305

COST-Earn

COST-Sales

Press Release

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except per share data)

(unaudited)


	12 Weeks Ended				24 Weeks Ended
	February 18, 2024		February 12, 2023		February 18, 2024		February 12, 2023
REVENUE
Net sales	$	57,331	$	54,239	$	114,048	$	107,676
Membership fees	1,111		1,027		2,193		2,027
Total revenue	58,442		55,266		116,241		109,703
OPERATING EXPENSES
Merchandise costs	51,140		48,423		101,597		96,192
Selling, general and administrative	5,240		4,940		10,598		9,857
Operating income	2,062		1,903		4,046		3,654
OTHER INCOME (EXPENSE)
Interest expense	(41)		(34)		(79)		(68)
Interest income and other, net	216		114		376		167
INCOME BEFORE INCOME TAXES	2,237		1,983		4,343		3,753
Provision for income taxes	494		517		1,011		923


NET INCOME	$	1,743	$	1,466	$	3,332	$	2,830
NET INCOME PER COMMON SHARE:
Basic	$	3.93	$	3.30	$	7.51	$	6.37
Diluted	$	3.92	$	3.30	$	7.49	$	6.37
Shares used in calculation (000's):
Basic	443,892		443,877		443,859		443,857
Diluted	444,754		444,475		444,579		444,503

Press Release

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in millions, except par value and share data)

(unaudited)

Subject to Reclassification


	February 18, 2024		September 3, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	9,095	$	13,700
Short-term investments	1,226		1,534
Receivables, net	2,779		2,285
Merchandise inventories	17,075		16,651
Other current assets	1,971		1,709
Total current assets	32,146		35,879
OTHER ASSETS
Property and equipment, net	27,601		26,684
Operating lease right-of-use assets	2,740		2,713
Other long-term assets	3,836		3,718
TOTAL ASSETS	$	66,323	$	68,994
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	17,494	$	17,483
Accrued salaries and benefits	4,801		4,278
Accrued member rewards	2,268		2,150
Deferred membership fees	2,541		2,337
Current portion of long-term debt	1,080		1,081
Other current liabilities	6,504		6,254
Total current liabilities	34,688		33,583
OTHER LIABILITIES
Long-term debt, excluding current portion	5,865		5,377
Long-term operating lease liabilities	2,488		2,426
Other long-term liabilities	2,522		2,550
TOTAL LIABILITIES	45,563		43,936
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $0.005 par value; 100,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock $0.005 par value; 900,000,000 shares authorized; 443,549,000 and 442,793,000 shares issued and outstanding	2		2
Additional paid-in capital	7,620		7,340
Accumulated other comprehensive loss	(1,842)		(1,805)
Retained earnings	14,980		19,521


TOTAL EQUITY	20,760		25,058
TOTAL LIABILITIES AND EQUITY	$	66,323	$	68,994

Press Release

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in millions)

(unaudited)

Subject to Reclassification


	24 Weeks Ended
	February 18, 2024		February 12, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	3,332	$	2,830
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,015		917
Non-cash lease expense	148		216
Stock-based compensation	580		549
Impairment of assets and other non-cash operating activities, net	(7)		145
Changes in working capital	314		1,145



Net cash provided by operating activities	5,382		5,802
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of short-term investments	(719)		(396)
Maturities and sales of short-term investments	1,029		512
Additions to property and equipment	(2,071)		(1,947)
Other investing activities, net	9		(34)
Net cash used in investing activities	(1,752)		(1,865)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of short-term borrowings	(409)		(520)
Proceeds from short-term borrowings	383		479
Proceeds from issuance of long-term debt	498		—
Tax withholdings on stock-based awards	(292)		(302)
Repurchases of common stock	(322)		(284)
Cash dividend payments	(8,012)		(400)
Financing lease payments	(94)		(158)
Other financing activities, net	(2)		(30)
Net cash used in financing activities	(8,250)		(1,215)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	15		45
Net change in cash and cash equivalents	(4,605)		2,767
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR	13,700		10,203
CASH AND CASH EQUIVALENTS END OF YEAR	$	9,095	$	12,970

Cover	Mar. 07, 2024
Cover [Abstract]
Amendment Flag	false
Entity Central Index Key	0000909832
Document Type	8-K
Document Period End Date	Mar. 07, 2024
Entity Incorporation, State or Country Code	WA
Entity File Number	0-20355
Entity Tax Identification Number	91-1223280
Entity Address, Address Line One	999 Lake Drive
Entity Address, City or Town	Issaquah
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98027
City Area Code	425
Local Phone Number	313-8100
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $.005 per share
Trading Symbol	COST
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Registrant Name	COSTCO WHOLESALE CORP /NEW