Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal 2018
ISSAQUAH, Wash., May 31, 2018 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the third quarter (twelve weeks) and the thirty-six weeks ended May 13, 2018.
Net sales for the quarter increased 12.1 percent, to $31.62 billion, from $28.22 billion last year. Net sales for the first thirty-six weeks of fiscal 2018 increased 12.0 percent, to $95.02 billion, from $84.82 billion last year.
Comparable sales for the third quarter and the thirty-six weeks were as follows:
| 12 Weeks | 12 Weeks | 36 Weeks | 36 Weeks | |||||||||||
| w/o gas inflation & FX | w/o gas inflation & FX | |||||||||||||
| U.S. | 9.7% | 7.7% | 9.0% | 7.3% | ||||||||||
| Canada | 11.3% | 4.8% | 10.4% | 3.8% | ||||||||||
| Other International | 11.8% | 5.8% | 12.6% | 7.1% | ||||||||||
| Total Company | 10.2% | 7.0% | 9.7% | 6.8% | ||||||||||
| E-commerce | 36.8% | 35.5% | 36.1% | 34.8% | ||||||||||
Net income for the quarter was $750 million, or $1.70 per diluted share, compared to $700 million, or $1.59 per diluted share, last year. Net income last year was positively impacted by an $82 million ($0.19 per diluted share) tax benefit in connection with the $7.00 per share special cash dividend declared in the third quarter of last year. Net income for the first thirty-six weeks of fiscal year 2018 was $2.09 billion, or $4.74 per diluted share, compared to $1.76 billion, or $3.99 per diluted share, last year.
Costco currently operates 750 warehouses, including 520 in the United States and Puerto Rico, 98 in Canada, 38 in Mexico, 28 in the United Kingdom, 26 in Japan, 14 in Korea, 13 in Taiwan, nine in Australia, two in Spain, one in Iceland, and one in France. Costco also operates e-commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea, and Taiwan.
A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, May 31, 2018, and is available 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 (generally including health care costs), energy and certain commodities, geopolitical conditions (including tariffs), 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
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
| 12 Weeks Ended | 36 Weeks Ended | ||||||||||||||
| May 13, 2018 | May 7, 2017 | May 13, 2018 | May 7, 2017 | ||||||||||||
| REVENUE | |||||||||||||||
| Net sales | $ | 31,624 | $ | 28,216 | $ | 95,020 | $ | 84,815 | |||||||
| Membership fees | 737 | 644 | 2,145 | 1,910 | |||||||||||
| Total revenue | 32,361 | 28,860 | 97,165 | 86,725 | |||||||||||
| OPERATING EXPENSES | |||||||||||||||
| Merchandise costs | 28,131 | 24,970 | 84,481 | 75,185 | |||||||||||
| Selling, general and administrative | 3,155 | 2,907 | 9,613 | 8,827 | |||||||||||
| Preopening expenses | 8 | 15 | 37 | 52 | |||||||||||
| Operating income | 1,067 | 968 | 3,034 | 2,661 | |||||||||||
| OTHER INCOME (EXPENSE) | |||||||||||||||
| Interest expense | (37 | ) | (21 | ) | (111 | ) | (81 | ) | |||||||
| Interest income and other, net | 41 | 18 | 70 | 40 | |||||||||||
| INCOME BEFORE INCOME TAXES | 1,071 | 965 | 2,993 | 2,620 | |||||||||||
| Provision for income taxes | 309 | 259 | 867 | 838 | |||||||||||
| Net income including noncontrolling interests | 762 | 706 | 2,126 | 1,782 | |||||||||||
| Net income attributable to noncontrolling interests | (12 | ) | (6 | ) | (35 | ) | (22 | ) | |||||||
| NET INCOME ATTRIBUTABLE TO COSTCO | $ | 750 | $ | 700 | $ | 2,091 | $ | 1,760 | |||||||
| NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | |||||||||||||||
| Basic | $ | 1.71 | $ | 1.59 | $ | 4.77 | $ | 4.01 | |||||||
| Diluted | $ | 1.70 | $ | 1.59 | $ | 4.74 | $ | 3.99 | |||||||
| Shares used in calculation (000’s): | |||||||||||||||
| Basic | 438,740 | 438,817 | 438,576 | 438,650 | |||||||||||
| Diluted | 441,715 | 441,056 | 441,383 | 440,745 | |||||||||||
| CASH DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.57 | $ | 7.50 | $ | 1.57 | $ | 8.40 | |||||||
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
| May 13, 2018 | September 3, 2017 | ||||||||
| ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | $ | 5,877 | $ | 4,546 | |||||
| Short-term investments | 1,167 | 1,233 | |||||||
| Receivables, net | 1,593 | 1,432 | |||||||
| Merchandise inventories | 10,626 | 9,834 | |||||||
| Other current assets | 430 | 272 | |||||||
| Total current assets | 19,693 | 17,317 | |||||||
| PROPERTY AND EQUIPMENT | |||||||||
| Land | 6,093 | 5,690 | |||||||
| Buildings and improvements | 15,786 | 15,127 | |||||||
| Equipment and fixtures | 7,161 | 6,681 | |||||||
| Construction in progress | 1,070 | 843 | |||||||
| 30,110 | 28,341 | ||||||||
| Less accumulated depreciation and amortization | (10,932 | ) | (10,180 | ) | |||||
| Net property and equipment | 19,178 | 18,161 | |||||||
| OTHER ASSETS | 734 | 869 | |||||||
| TOTAL ASSETS | $ | 39,605 | $ | 36,347 | |||||
| LIABILITIES AND EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Accounts payable | $ | 10,705 | $ | 9,608 | |||||
| Accrued salaries and benefits | 2,697 | 2,703 | |||||||
| Accrued member rewards | 1,041 | 961 | |||||||
| Deferred membership fees | 1,679 | 1,498 | |||||||
| Other current liabilities | 3,289 | 2,725 | |||||||
| Total current liabilities | 19,411 | 17,495 | |||||||
| LONG-TERM DEBT, excluding current portion | 6,492 | 6,573 | |||||||
| OTHER LIABILITIES | 1,255 | 1,200 | |||||||
| Total liabilities | 27,158 | 25,268 | |||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||
| EQUITY | |||||||||
| Preferred stock $.01 par value; 100,000,000 shares authorized; no shares issued and outstanding | — | — | |||||||
| Common stock $.01 par value; 900,000,000 shares authorized; 438,602,000 and 437,204,000 shares issued and outstanding | 4 | 4 | |||||||
| Additional paid-in capital | 6,001 | 5,800 | |||||||
| Accumulated other comprehensive loss | (1,038 | ) | (1,014 | ) | |||||
| Retained earnings | 7,176 | 5,988 | |||||||
| Total Costco stockholders’ equity | 12,143 | 10,778 | |||||||
| Noncontrolling interests | 304 | 301 | |||||||
| Total equity | 12,447 | 11,079 | |||||||
| TOTAL LIABILITIES AND EQUITY | $ | 39,605 | $ | 36,347 | |||||