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October 3, 2019 at 4:15 PM EDT

Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2019 Operating Results

ISSAQUAH, Wash., Oct. 03, 2019 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the 16-week fourth quarter and the 52-week fiscal year, ended September 1, 2019.

Net sales for the quarter were $46.45 billion, an increase of 7.0 percent from $43.41 billion during the similar period last year. Net sales for the fiscal year were $149.35 billion, an increase of 7.9 percent from $138.43 billion during the similar period last year.

Comparable sales for the fourth quarter and the fiscal year were as follows:

                                                                                                                                      
                   
    16 Weeks   16 Weeks   52 Weeks   52 Weeks  
        Adjusted*       Adjusted*  
  U.S. 6.2%   5.2%   7.8%   6.4%  
  Canada 2.6%   4.7%   1.6%   5.3%  
  Other International 1.9%   5.0%   2.0%   5.6%  
                   
  Total Company 5.1%   5.1%   6.1%   6.1%  
                   
  E-commerce 19.8%   21.9%   23.1%   23.3%  
                   
 

*Excluding the impacts from changes in gasoline prices, foreign exchange, and a previously disclosed accounting change concerning revenue recognition (ASC 606).

Net income for the fourth quarter was $1,097 million, or $2.47 per diluted share, compared to $1,043 million, or $2.36 per diluted share, last year.  This year’s fourth quarter was negatively impacted by a $123 million pre-tax reserve to SG&A ($96 million after-tax), or 22 cents per diluted share, related to a product tax assessment.

Net income for the fiscal year was $3.66 billion, or $8.26 per diluted share, compared to $3.13 billion, or $7.09 per diluted share, in the prior year. As previously disclosed and mentioned above, this year's net income was impacted by a net benefit of $30 million or $0.07 per diluted share from primarily non-recurring items.  Last year was positively impacted by a first quarter tax benefit of $41 million or $0.09 per diluted share.

Costco currently operates 783 warehouses, including 544 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, one in France, one in Iceland, and one in China. 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, October 3, 2019, 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. 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 remediate material weaknesses in internal control, 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 that they are made, and the Company does not undertake to update them, 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 CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (dollars in millions, except per share data)
(unaudited)

                                                                                                                                                                                                                                                                                                                                                                              
  16 Weeks Ended   52 Weeks Ended
  September 1,
2019
  September 2,
2018
  September 1,
2019
  September 2,
2018
REVENUE              
Net sales $ 46,448     $ 43,414     $ 149,351     $ 138,434  
Membership fees 1,050     997     3,352     3,142  
Total revenue 47,498     44,411     152,703     141,576  
OPERATING EXPENSES              
Merchandise costs 41,310     38,671     132,886     123,152  
Selling, general and administrative 4,684     4,263     14,994     13,876  
Preopening expenses 41     31     86     68  
Operating income 1,463     1,446     4,737     4,480  
OTHER INCOME (EXPENSE)              
Interest expense (45 )   (48 )   (150 )   (159 )
Interest income and other, net 74     51     178     121  
INCOME BEFORE INCOME TAXES 1,492     1,449     4,765     4,442  
Provision for income taxes 382     396     1,061     1,263  
Net income including noncontrolling interests 1,110     1,053     3,704     3,179  
Net income attributable to noncontrolling interests (13 )   (10 )   (45 )   (45 )
NET INCOME ATTRIBUTABLE TO COSTCO $ 1,097     $ 1,043     $ 3,659     $ 3,134  
               
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:              
Basic $ 2.49     $ 2.38     $ 8.32     $ 7.15  
Diluted $ 2.47     $ 2.36     $ 8.26     $ 7.09  
               
Shares used in calculation (000’s):              
Basic 439,727     438,379     439,755     438,515  
Diluted 443,400     442,427     442,923     441,834  
               
 

 

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 (amounts in millions, except par value and share data)
(unaudited)

Subject to Reclassifications

                                                                                                                                                                                                                                                                                                                                                        
      September 1, 2019   September 2, 2018
ASSETS      
CURRENT ASSETS      
Cash and cash equivalents $ 8,384     $ 6,055  
Short-term investments 1,060     1,204  
Receivables, net 1,535     1,669  
Merchandise inventories 11,395     11,040  
Other current assets 1,111     321  
Total current assets 23,485     20,289  
PROPERTY AND EQUIPMENT      
Land 6,417     6,193  
Buildings and improvements 17,136     16,107  
Equipment and fixtures 7,801     7,274  
Construction in progress 1,272     1,140  
  32,626     30,714  
Less accumulated depreciation and amortization (11,736 )   (11,033 )
Net property and equipment 20,890     19,681  
OTHER ASSETS 1,025     860  
TOTAL ASSETS $ 45,400     $ 40,830  
LIABILITIES AND EQUITY      
CURRENT LIABILITIES      
Accounts payable $ 11,679     $ 11,237  
Accrued salaries and benefits 3,176     2,994  
Accrued member rewards 1,180     1,057  
Deferred membership fees 1,711     1,624  
Current portion of long-term debt 1,699     90  
Other current liabilities 3,792     2,924  
Total current liabilities 23,237     19,926  
LONG-TERM DEBT, excluding current portion 5,124     6,487  
OTHER LIABILITIES 1,455     1,314  
Total liabilities 29,816     27,727  
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; 439,625,000 and 438,189,000 shares issued and outstanding 4     4  
Additional paid-in capital 6,417     6,107  
Accumulated other comprehensive loss (1,436 )   (1,199 )
Retained earnings 10,258     7,887  
Total Costco stockholders’ equity 15,243     12,799  
Noncontrolling interests 341     304  
Total equity 15,584     13,103  
TOTAL LIABILITIES AND EQUITY $ 45,400     $ 40,830  
                   
 

 

 

Source: Costco Wholesale Corporation