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December 12, 2019 at 4:15 PM EST

Costco Wholesale Corporation Reports First Quarter Fiscal Year 2020 Operating Results

ISSAQUAH, Wash., Dec. 12, 2019 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the first quarter (twelve weeks) of fiscal 2020, ended November 24, 2019.

Net sales for the first quarter were $36.24 billion, an increase of 5.6 percent from $34.31 billion last year.

Comparable sales for the first quarter fiscal 2020 were as follows:

    12 Weeks   12 Weeks  
        Adjusted*  
  U.S. 4.7%   5.0%  
  Canada 2.9%   5.1%  
  Other International 3.2%   4.5%  
           
  Total Company 4.3%   5.0%  
           
  E-commerce 5.5%   5.7%  

*Excluding the impacts from changes in gasoline prices and foreign exchange.

Total and comparable sales were negatively impacted by approximately one-half percent due to Thanksgiving occurring a week later this year. E-commerce sales in the quarter were negatively impacted by an estimated 12 percentage points.

Net income for the quarter was $844 million, or $1.90 per diluted share, compared to $767 million, or $1.73 per diluted share, last year. This year’s first quarter reflects a $77 million ($0.17 per diluted share) tax benefit related to stock-based compensation, compared to a $59 million ($0.13 per diluted share) similar benefit last year.

Costco currently operates 785 warehouses, including 546 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, and one each in Iceland, France, and China. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, and Japan.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, December 12, 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 maintain effective internal control over financial reporting, 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
Josh Dahmen, 425/313-8254

     
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (dollars in millions, except per share data)
(unaudited)
     
    12 Weeks Ended
         
    November 24, 2019   November 25, 2018
  REVENUE              
  Net sales $ 36,236     $ 34,311  
  Membership fees   804       758  
  Total revenue $ 37,040       35,069  
  OPERATING EXPENSES              
  Merchandise costs   32,233       30,623  
  Selling, general and administrative   3,732       3,475  
  Preopening expenses   14       22  
  Operating income   1,061       949  
  OTHER INCOME (EXPENSE)              
  Interest expense   (38 )     (36 )
  Interest income and other, net   35       22  
  INCOME BEFORE INCOME TAXES   1,058       935  
  Provision for income taxes   202       158  
  Net income including noncontrolling interests   856       777  
  Net income attributable to noncontrolling interests   (12 )     (10 )
  NET INCOME ATTRIBUTABLE TO COSTCO $ 844     $ 767  
                 
  NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:              
  Basic $ 1.91     $ 1.75  
  Diluted $ 1.90     $ 1.73  
                 
  Shares used in calculation (000’s):              
  Basic   441,818       439,157  
  Diluted   443,680       442,749  
                 

 

         
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
         
  Subject to Reclassification November 24, 2019   September 1, 2019
  ASSETS      
  CURRENT ASSETS      
  Cash and cash equivalents $ 9,027     $ 8,384  
  Short-term investments 993     1,060  
  Receivables, net 1,711     1,535  
  Merchandise inventories 13,818     11,395  
  Other current assets 1,094     1,111  
  Total current assets 26,643     23,485  
  PROPERTY AND EQUIPMENT      
  Land 6,533     6,417  
  Buildings and improvements 17,712     17,136  
  Equipment and fixtures 8,243     7,801  
  Construction in progress 803     1,272  
  Accumulated depreciation and amortization (12,054 )   (11,736 )
  Net property and equipment 21,237     20,890  
  OTHER ASSETS      
  Operating lease right-of-use assets 2,508      
  Other long-term assets 954     1,025  
  TOTAL ASSETS $ 51,342     $ 45,400  
  LIABILITIES AND EQUITY      
  CURRENT LIABILITIES      
  Accounts payable $ 14,440     $ 11,679  
  Accrued salaries and benefits 3,159     3,176  
  Accrued member rewards 1,193     1,180  
  Deferred membership fees 1,817     1,711  
  Current portion of long-term debt 1,700     1,699  
  Other current liabilities 3,956     3,792  
  Total current liabilities 26,265     23,237  
  LONG-TERM LIABILITIES      
  Long-term debt, excluding current portion 5,107     5,124  
  Long-term operating lease liabilities 2,353      
  Other long-term liabilities 1,393     1,455  
  TOTAL LIABILITIES 35,118     29,816  
  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; 441,778,000 and 439,625,000 shares issued and outstanding 4     4  
  Additional paid-in capital 6,391     6,417  
  Accumulated other comprehensive loss (1,321 )   (1,436 )
  Retained earnings 10,787     10,258  
  Total Costco stockholders’ equity 15,861     15,243  
  Noncontrolling interests 363     341  
  TOTAL EQUITY 16,224     15,584  
  TOTAL LIABILITIES AND EQUITY $ 51,342     $ 45,400  
                 

 

 

Source: Costco Wholesale Corporation