Form 8-K COSTCO WHOLESALE CORP For: Mar 02

 

 

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 2, 2016

 

 

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))

 

 

 

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Item 2.02. Results of Operations and Financial Condition

On March 2, 2016, the Company issued a press release containing its operating results for the second quarter (twelve weeks) and first half (24 weeks) of fiscal 2016, ended February 14, 2016, and its February sales results. A copy of the press release is included in Item 9.01.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits. The following exhibit is included in this report:

 

99.1.		Press release dated March 2, 2016.

 

2

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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, on March 2, 2016.

 

 

3

Exhibit 99.1

 

Press Release

 

 

COSTCO WHOLESALE CORPORATION REPORTS SECOND QUARTER AND YEAR-TO-DATE

OPERATING RESULTS FOR FISCAL YEAR 2016 AND FEBRUARY SALES RESULTS

ISSAQUAH, Wash., March 2, 2016 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the second quarter (twelve weeks) and first half (24 weeks) of fiscal 2016, ended February 14, 2016.

Net sales for the quarter increased three percent, to $27.57 billion from $26.87 billion last year. Net sales for the first half increased two percent, to $54.19 billion from $53.16 billion last year.

Comparable sales for the twelve-week and twenty-four-week periods were as follows:

 

		12 Weeks				24 Weeks
U.S.			3	%			3	%
Canada			-7	%			-8	%
Other International			-3	%			-4	%
Total Company			1	%			0	%

Comparable sales for these periods, excluding the negative impacts from gasoline price deflation and foreign exchange were as follows:

 

		12 Weeks				24 Weeks
U.S.			4	%			5	%
Canada			10	%			10	%
Other International			6	%			6	%
Total Company			5	%			6	%

Net income for the quarter was $546 million, or $1.24 per diluted share, compared to $598 million, or $1.35 per diluted share, last year. Net income for the first half was $1,026 million, or $2.32 per diluted share, compared to $1,094 million, or $2.47 per diluted share, last year.

Net income for the quarter last year was positively impacted by a $57 million ($0.13 per diluted share) tax benefit in connection with a special cash dividend received by the Company 401(k) plan participants, and was negatively impacted by a $14 million ($0.03 per diluted share) tax charge relating to an ongoing income tax matter.

For the four-week reporting month of February, ended February 28, 2016, the Company reported net sales of $8.28 billion, an increase of one percent from $8.18 billion during the similar four-week period last year. For the twenty-six week period ended February 28, 2016, net sales were $58.25 billion, an increase of two percent from $57.19 billion during the similar period last year.

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Press Release

 

 

 

Comparable sales for the four-week and twenty-six-week periods ended February 28, 2016 were as follows:

 

		4 Weeks				26 Weeks
U.S.			2	%			2	%
Canada			-2	%			-8	%
Other International			-8	%			-5	%
Total Company			0	%			0	%

Comparable sales for these periods, excluding the negative impacts from gasoline price deflation and foreign exchange, were as follows:

 

		4 Weeks				26 Weeks
U.S.			4	%			5	%
Canada			10	%			10	%
Other International			0	%			6	%
Total Company			4	%			5	%

Costco currently operates 698 warehouses, including 488 in the United States and Puerto Rico, 90 in Canada, 36 in Mexico, 27 in the United Kingdom, 24 in Japan, 12 in Korea, 11 in Taiwan, eight in Australia and two in Spain. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.

A conference call to discuss these fiscal 2016 second quarter operating results and February sales results is scheduled for 8:00 a.m. (PT) on March 3, 2016, 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. 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 (including health care costs), energy and certain commodities, geopolitical conditions, 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 we do 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, Jeff Elliott, 425/313-8264

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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 14, 2016				February 15, 2015				February 14, 2016				February 15, 2015
REVENUE
Net sales		$	27,567			$	26,872			$	54,194			$	53,156
Membership fees			603				582				1,196				1,164
Total revenue			28,170				27,454				55,390				54,320
OPERATING EXPENSES
Merchandise costs			24,469				23,897				48,090				47,282
Selling, general and administrative			2,835				2,671				5,641				5,367
Preopening expenses			10				9				36				24
Operating income			856				877				1,623				1,647
OTHER INCOME (EXPENSE)
Interest expense			(31	)			(27	)			(64	)			(53	)
Interest income and other, net			16				20				44				55
INCOME BEFORE INCOME TAXES			841				870				1,603				1,649
Provision for income taxes			286				263				561				537
Net income including noncontrolling interests			555				607				1,042				1,112
Net income attributable to noncontrolling interests			(9	)			(9	)			(16	)			(18	)
NET INCOME ATTRIBUTABLE TO COSTCO		$	546			$	598			$	1,026			$	1,094
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
Basic		$	1.24			$	1.36			$	2.34			$	2.49
Diluted		$	1.24			$	1.35			$	2.32			$	2.47
Shares used in calculation: (000’s)
Basic			439,648				440,384				438,990				439,567
Diluted			441,559				442,896				441,457				442,522
Cash dividends declared per common share		$	0.40			$	5.355			$	0.80			$	5.710

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Press Release

 

 

 

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(unaudited)

Subject to Reclassifications

 

		February 14, 2016				August 30, 2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	3,633			$	4,801
Short-term investments			1,222				1,618
Receivables, net			1,453				1,224
Merchandise inventories			8,908				8,908
Other current assets			313				228
Total current assets			15,529				16,779
PROPERTY AND EQUIPMENT
Land			5,140				4,961
Buildings and improvements			13,212				12,618
Equipment and fixtures			5,623				5,274
Construction in progress			727				811
			24,702				23,664
Less accumulated depreciation and amortization			(8,637	)			(8,263	)
Net property and equipment			16,065				15,401
OTHER ASSETS			794				837
TOTAL ASSETS		$	32,388			$	33,017
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable		$	8,222			$	9,011
Current portion of long-term debt			89				1,283
Accrued salaries and benefits			2,619				2,468
Accrued member rewards			846				813
Deferred membership fees			1,377				1,269
Other current liabilities			2,280				1,695
Total current liabilities			15,433				16,539
LONG-TERM DEBT, excluding current portion			4,886				4,852
OTHER LIABILITIES			835				783
Total liabilities			21,154				22,174
COMMITMENTS AND CONTINGENCIES
EQUITY
Preferred stock $.005 par value; 100,000,000 shares authorized; no shares issued and outstanding			0				0
Common stock $.005 par value; 900,000,000 shares authorized; 439,256,000 and 437,952,000 shares issued and outstanding			2				2
Additional paid-in capital			5,341				5,218
Accumulated other comprehensive loss			(1,344	)			(1,121	)
Retained earnings			7,001				6,518
Total Costco stockholders’ equity			11,000				10,617
Noncontrolling interests			234				226
Total equity			11,234				10,843
TOTAL LIABILITIES AND EQUITY		$	32,388			$	33,017

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