Costco Wholesale Corporation Reports Second Quarter and Year-to-Date Operating Results for Fiscal Year 2016 and February Sales Results
ISSAQUAH, WA -- (Marketwired) -- 03/02/16 -- 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
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U.S. 3% 3%
Canada -7% -8%
Other International -3% -4%
Total Company 1% 0%
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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%
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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.
Comparable sales for the four-week and twenty-six-week periods ended February 28, 2016 were as follows:
4 Weeks 26 Weeks
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U.S. 2% 2%
Canada -2% -8%
Other International -8% -5%
Total Company 0% 0%
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Comparable sales for these periods, excluding the negative impacts from gasoline price deflation and foreign exchange, were as follows:
4 Weeks 26 Weeks
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U.S. 4% 5%
Canada 10% 10%
Other International 0% 6%
Total Company 4% 5%
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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.
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
12 Weeks Ended 24 Weeks Ended
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February February February February
14, 2016 15, 2015 14, 2016 15, 2015
--------- --------- --------- ---------
REVENUE
Net sales $ 27,567 $ 26,872 $ 54,194 $ 53,156
Membership fees 603 582 1,196 1,164
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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
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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
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INCOME BEFORE INCOME TAXES 841 870 1,603 1,649
Provision for income taxes 286 263 561 537
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Net income including
noncontrolling interests 555 607 1,042 1,112
Net income attributable to
noncontrolling interests (9) (9) (16) (18)
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NET INCOME ATTRIBUTABLE TO
COSTCO $ 546 $ 598 $ 1,026 $ 1,094
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NET INCOME PER COMMON SHARE
ATTRIBUTABLE TO COSTCO:
Basic $ 1.24 $ 1.36 $ 2.34 $ 2.49
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Diluted $ 1.24 $ 1.35 $ 2.32 $ 2.47
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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
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
February 14, August 30,
2016 2015
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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
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Total current assets 15,529 16,779
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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
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24,702 23,664
Less accumulated depreciation and
amortization (8,637) (8,263)
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Net property and equipment 16,065 15,401
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OTHER ASSETS 794 837
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TOTAL ASSETS $ 32,388 $ 33,017
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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
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Total current liabilities 15,433 16,539
LONG-TERM DEBT, excluding current portion 4,886 4,852
OTHER LIABILITIES 835 783
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Total liabilities 21,154 22,174
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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
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Total Costco stockholders' equity 11,000 10,617
Noncontrolling interests 234 226
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Total equity 11,234 10,843
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TOTAL LIABILITIES AND EQUITY $ 32,388 $ 33,017
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CONTACTS: Costco Wholesale Corporation Richard Galanti 425/313-8203 Bob Nelson 425/313-8255 Jeff Elliott 425/313-8264
Source: Costco