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News Release

Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal Year 2017

ISSAQUAH, Wash., May 25, 2017 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq:COST) today announced its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2017, ended May 7, 2017.

Net sales for the quarter increased eight percent, to $28.22 billion from $26.15 billion last year.  Net sales for the first thirty-six weeks increased six percent, to $84.82 billion from $80.34 billion last year.

Comparable sales for the twelve-week and thirty-six-week periods were as follows:

    12 Weeks   36 Weeks

U.S.
 
6

%
 
3

%
Canada   2 %   5 %
Other International       4 %   0 %
         
Total Company   5 %   3 %

Comparable sales for these periods excluding the impacts from changes in gasoline prices and foreign exchange were as follows:

    12 Weeks   36 Weeks

U.S.
 
5

%
   
3

%
Canada   3 %   3 %
Other International       6 %   4 %
         
Total Company   5 %   3 %

Net income for the quarter was $700 million, or $1.59 per diluted share, compared to $545 million, or $1.24 per diluted share, last year.  Net income 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 announced on April 25, 2017, to the extent to be received by the Company’s 401(k) plan participants.  Net income for the thirty six weeks was $1.76 billion, or $3.99 per diluted share, compared to $1.57 billion, or $3.56 per diluted share, last year.

Costco currently operates 732 warehouses, including 510 in the United States and Puerto Rico, 95 in Canada, 37 in Mexico, 28 in the United Kingdom, 25 in Japan, 13 in Korea, 13 in Taiwan, eight in Australia, two in Spain and one in Iceland.  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 2017 third quarter operating results is scheduled for 2:00 p.m. (PT) on May 25, 2017, 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     36 Weeks Ended
      May 7,
2017
      May 8,
 2016
      May 7,
 2017
      May 8,
 2016
REVENUE                        
Net sales   $ 28,216     $ 26,151     $ 84,815     $ 80,345  
Membership fees     644       618       1,910       1,814  
Total revenue     28,860       26,769       86,725       82,159  
OPERATING EXPENSES                        
Merchandise costs     24,970       23,162       75,185       71,252  
Selling, general and administrative     2,907       2,731       8,827       8,372  
Preopening expenses     15       18       52       54  
Operating income     968       858       2,661       2,481  
OTHER INCOME (EXPENSE)                        
Interest expense     (21 )     (30 )     (81 )     (94 )
Interest income and other, net     18       7       40       51  
INCOME BEFORE INCOME TAXES     965       835       2,620       2,438  
Provision for income taxes     259       286       838       847  
Net income including noncontrolling interests     706       549       1,782       1,591  
Net income attributable to noncontrolling interests           (6 )     (4 )     (22 )     (20 )
NET INCOME ATTRIBUTABLE TO COSTCO   $ 700     $ 545     $ 1,760     $ 1,571  
                         
NET INCOME PER COMMON SHARE
  ATTRIBUTABLE TO COSTCO:
                       
Basic   $ 1.59     $ 1.24     $ 4.01     $ 3.58  
Diluted   $ 1.59     $ 1.24     $ 3.99     $ 3.56  
                         
Shares used in calculation (000’s):                        
Basic     438,817       438,815       438,650       438,930  
Diluted     441,056       441,066       440,745       441,321  
                         
                         
Cash dividends declared per common share   $ 7.50     $ 0.45     $ 8.40     $ 1.25  


COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 (amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
       
  May 7,
 2017
  August 28,
 2016  
ASSETS      
CURRENT ASSETS      
Cash and cash equivalents $ 4,538     $ 3,379  
Short-term investments 1,187     1,350  
Receivables, net 1,462     1,252  
Merchandise inventories 9,736     8,969  
Other current assets 333     268  
Total current assets 17,256     15,218  
PROPERTY AND EQUIPMENT      
Land 5,505     5,395  
Buildings and improvements 14,509     13,994  
Equipment and fixtures 6,507     6,077  
Construction in progress 803     701  
  27,324     26,167  
Less accumulated depreciation and amortization (9,789 )   (9,124 )
Net property and equipment 17,535     17,043  
OTHER ASSETS 840     902  
TOTAL ASSETS $ 35,631     $ 33,163  
LIABILITIES AND EQUITY      
CURRENT LIABILITIES      
Accounts payable $ 9,425     $ 7,612  
Current portion of long-term debt 1,158     1,100  
Accrued salaries and benefits 2,514     2,629  
Accrued member rewards 923     869  
Deferred membership fees 1,479     1,362  
Other current liabilities 5,895     2,003  
Total current liabilities 21,394     15,575  
LONG-TERM DEBT, excluding current portion 2,821     4,061  
OTHER LIABILITIES 1,231     1,195  
Total liabilities 25,446       20,831  
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; 438,679,000 and 437,524,000 shares issued and outstanding     2     2  
Additional paid-in capital 5,709     5,490  
Accumulated other comprehensive loss (1,321 )   (1,099 )
Retained earnings 5,508     7,686  
Total Costco stockholders’ equity 9,898     12,079  
Noncontrolling interests 287     253  
Total equity 10,185     12,332  
TOTAL LIABILITIES AND EQUITY $ 35,631     $ 33,163  
CONTACTS: Costco Wholesale Corporation
Richard Galanti, 425/313-8203, Bob Nelson, 425/313-8255, David Sherwood, 425/313-8239

Costco Wholesale Corporation