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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  
 

Costco Wholesale Corporation