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 2020, ended
February 16, 2020.
Net sales for the quarter increased 10.5
percent, to $38.26 billion from $34.63 billion last year. Net sales
for the first 24 weeks increased 8.1 percent, to $74.49 billion
from $68.94 billion last year.
Comparable sales for the second quarter fiscal
2020 were as follows:
|
|
12 Weeks |
|
12 Weeks |
|
24 Weeks |
|
24 Weeks |
|
|
|
|
|
Adjusted* |
|
|
|
Adjusted* |
|
|
U.S. |
9.1% |
|
8.1% |
|
7.0% |
|
6.6% |
|
|
Canada |
8.9% |
|
6.8% |
|
5.8% |
|
5.9% |
|
|
Other International |
7.9% |
|
7.1% |
|
5.5% |
|
5.8% |
|
|
|
|
|
|
|
|
|
|
|
|
Total Company |
8.9% |
|
7.9% |
|
6.6% |
|
6.5% |
|
|
|
|
|
|
|
|
|
|
|
|
E-commerce |
28.4% |
|
28.0% |
|
17.4% |
|
17.3% |
|
|
|
|
|
|
|
|
|
|
|
|
*Excluding the impacts from changes in gasoline prices and foreign
exchange. |
|
Due to Thanksgiving occurring a week later this year, for the
quarter: total and comparable sales were positively impacted by
approximately one-half percent; and e-commerce sales were
positively impacted by an estimated 11 percentage points.
Reported net income for the quarter was $931
million, or $2.10 per diluted share, compared to $889 million, or
$2.01 per diluted share, last year. Net income for the first 24
weeks was $1.77 billion, or $4.00 per diluted share, compared to
$1.66 billion, or $3.74 per diluted share, last year.
For the four-week reporting month of February,
ended March 1, 2020, the Company reported net sales of $12.20
billion, an increase of 13.8 percent from $10.72 billion last year.
For the twenty-six week period ended March 1, 2020, net sales were
$80.76 billion, an increase of 8.5 percent from $74.42 billion last
year.
Comparable sales for the February and
year-to-date periods ended March 1, 2020, were as follows:
|
|
4 Weeks |
|
4 Weeks |
|
26 Weeks |
|
26 Weeks |
|
|
|
|
|
Adjusted* |
|
|
|
Adjusted* |
|
|
U.S. |
12.4% |
|
11.6% |
|
7.5% |
|
7.1% |
|
|
Canada |
10.2% |
|
10.4% |
|
6.2% |
|
6.3% |
|
|
Other International |
12.5% |
|
13.5% |
|
6.1% |
|
6.5% |
|
|
|
|
|
|
|
|
|
|
|
|
Total Company |
12.1% |
|
11.7% |
|
7.2% |
|
7.0% |
|
|
|
|
|
|
|
|
|
|
|
|
E-commerce |
22.6% |
|
22.7% |
|
17.9% |
|
17.9% |
|
|
|
|
|
|
|
|
*Excluding the impacts from changes in gasoline prices and foreign
exchange. |
|
February sales benefited from an uptick in consumer demand in
the fourth week of the reporting period. We attribute this to
concerns over the Coronavirus and estimate the positive impact on
total and comparable sales to be approximately three percent.
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,
Japan, and Australia.
A conference call to discuss these results is scheduled for 2:00
p.m. (PT) today, March 5, 2020, and is available via a webcast on
www.costco.com (click on Investor Relations and “Play
Webcast”).
Certain statements contained in this document
and the pre-recorded telephone message 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, global disease threats, 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 |
|
24 Weeks Ended |
|
February 16, 2020 |
|
February 17, 2019 |
|
February 16, 2020 |
|
February 17, 2019 |
REVENUE |
|
|
|
|
|
|
|
Net sales |
$ |
38,256 |
|
|
$ |
34,628 |
|
|
$ |
74,492 |
|
|
$ |
68,939 |
|
Membership fees |
|
816 |
|
|
768 |
|
|
1,620 |
|
|
1,526 |
|
Total revenue |
$ |
39,072 |
|
|
35,396 |
|
|
76,112 |
|
|
70,465 |
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
Merchandise costs |
|
34,056 |
|
|
30,720 |
|
|
66,289 |
|
|
61,343 |
|
Selling, general and administrative |
|
3,743 |
|
|
3,464 |
|
|
7,475 |
|
|
6,939 |
|
Preopening expenses |
|
7 |
|
|
9 |
|
|
21 |
|
|
31 |
|
Operating income |
|
1,266 |
|
|
1,203 |
|
|
2,327 |
|
|
2,152 |
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
Interest expense |
|
(34 |
) |
|
(34 |
) |
|
(72 |
) |
|
(70 |
) |
Interest income and other, net |
|
45 |
|
|
46 |
|
|
80 |
|
|
68 |
|
INCOME BEFORE INCOME
TAXES |
|
1,277 |
|
|
1,215 |
|
|
2,335 |
|
|
2,150 |
|
Provision for income taxes |
|
330 |
|
|
314 |
|
|
532 |
|
|
472 |
|
Net income including noncontrolling interests |
|
947 |
|
|
901 |
|
|
1,803 |
|
|
1,678 |
|
Net income attributable to noncontrolling interests |
|
(16 |
) |
|
(12 |
) |
|
(28 |
) |
|
(22 |
) |
NET INCOME
ATTRIBUTABLE TO COSTCO |
$ |
931 |
|
|
$ |
889 |
|
|
$ |
1,775 |
|
|
$ |
1,656 |
|
|
|
|
|
|
|
|
|
NET INCOME PER COMMON
SHARE ATTRIBUTABLE TO COSTCO: |
|
|
|
|
|
|
|
Basic |
$ |
2.10 |
|
|
$ |
2.02 |
|
|
$ |
4.02 |
|
|
$ |
3.77 |
|
Diluted |
$ |
2.10 |
|
|
$ |
2.01 |
|
|
$ |
4.00 |
|
|
$ |
3.74 |
|
|
|
|
|
|
|
|
|
Shares used in calculation
(000’s): |
|
|
|
|
|
|
|
Basic |
|
442,021 |
|
|
440,284 |
|
|
441,920 |
|
|
439,721 |
|
Diluted |
|
443,727 |
|
|
442,337 |
|
|
443,704 |
|
|
442,535 |
|
|
|
|
|
|
|
|
|
COSTCO WHOLESALE
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS (amounts in millions, except par value
and share data) (unaudited)
|
|
|
|
Subject to Reclassifications |
February 16, 2020 |
|
September 1, 2019 |
ASSETS |
|
|
|
CURRENT
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
7,786 |
|
|
$ |
8,384 |
|
Short-term investments |
929 |
|
|
1,060 |
|
Receivables, net |
1,988 |
|
|
1,535 |
|
Merchandise inventories |
11,850 |
|
|
11,395 |
|
Other current assets |
1,150 |
|
|
1,111 |
|
Total current assets |
23,703 |
|
|
23,485 |
|
PROPERTY
AND EQUIPMENT |
|
|
|
Land |
6,696 |
|
|
6,417 |
|
Buildings and improvements |
17,853 |
|
|
17,136 |
|
Equipment and fixtures |
8,406 |
|
|
7,801 |
|
Construction in progress |
906 |
|
|
1,272 |
|
Accumulated depreciation and amortization |
(12,380 |
) |
|
(11,736 |
) |
Net property and equipment |
21,481 |
|
|
20,890 |
|
OTHER
ASSETS |
|
|
|
Operating lease right-of-use assets |
2,596 |
|
|
— |
|
Other long-term assets |
1,002 |
|
|
1,025 |
|
TOTAL ASSETS |
$ |
48,782 |
|
|
$ |
45,400 |
|
LIABILITIES AND EQUITY |
|
|
|
CURRENT
LIABILITIES |
|
|
|
Accounts payable |
$ |
11,072 |
|
|
$ |
11,679 |
|
Accrued salaries and benefits |
3,415 |
|
|
3,176 |
|
Accrued member rewards |
1,243 |
|
|
1,180 |
|
Deferred membership fees |
1,865 |
|
|
1,711 |
|
Current portion of long-term debt |
500 |
|
|
1,699 |
|
Other current liabilities |
4,600 |
|
|
3,792 |
|
Total current liabilities |
22,695 |
|
|
23,237 |
|
OTHER
LIABILITIES |
|
|
|
Long-term debt, excluding current portion |
5,099 |
|
|
5,124 |
|
Long-term operating lease liabilities |
2,446 |
|
|
— |
|
Other long-term liabilities |
1,543 |
|
|
1,455 |
|
TOTAL LIABILITIES |
31,783 |
|
|
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;
441,622,000 and 439,625,000 shares issued and outstanding |
4 |
|
|
4 |
|
Additional paid-in capital |
6,506 |
|
|
6,417 |
|
Accumulated other comprehensive loss |
(1,280 |
) |
|
(1,436 |
) |
Retained earnings |
11,384 |
|
|
10,258 |
|
Total Costco stockholders’ equity |
16,614 |
|
|
15,243 |
|
Noncontrolling interests |
385 |
|
|
341 |
|
TOTAL EQUITY |
16,999 |
|
|
15,584 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
48,782 |
|
|
$ |
45,400 |
|
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