Costco (COST) Reports In-Line Q4 EPS, Comps Increase 9.5%; Expects to Report Material Weakness in Internal Control

October 4, 2018 4:16 PM EDT

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(Updated - October 4, 2018 4:18 PM EDT)

Costco (NASDAQ: COST) reported Q4 EPS of $2.36, in-line with the analyst estimate of $2.36. Revenue for the quarter came in at $44.41 billion versus the consensus estimate of $44.27 billion.

Comparable sales for the 16-week fourth quarter, and the 52-week fiscal year were as follows:

16 Weeks 52 Weeks
U.S. 10.8% 9.4%
Canada 5.7% 8.9%
Other International 6.7% 10.8%
Total Company 9.5% 9.5%
E-commerce 26.2% 32.2%

While the Company is still completing its assessment of the effectiveness of its internal control over financial reporting as of September 2, 2018, in its upcoming fiscal 2018 Annual Report on Form 10-K, it expects to report a material weakness in internal control. The weakness relates to general information technology controls in the areas of user access and program change-management over certain information technology systems that support the Company’s financial reporting processes. The access issues relate to the extent of privileges afforded users authorized to access company systems. As of the date of this release, there have been no misstatements identified in the financial statements as a result of these deficiencies, and the Company expects to timely file its Form 10-K.

Remediation efforts have begun; the material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. The Company expects that the remediation of this material weakness will be completed prior to the end of fiscal year 2019.

For earnings history and earnings-related data on Costco (COST) click here.



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