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September 24, 2020 at 4:15 PM EDT

Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2020 Operating Results

ISSAQUAH, Wash., Sept. 24, 2020 (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 August 30, 2020.

Net sales for the quarter increased 12.5 percent, to $52.28 billion from $46.45 billion last year. Net sales for the fiscal year increased 9.3 percent, to $163.22 billion from $149.35 billion 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.   11.0%   13.6%   8.1%   9.2%  
  Canada   9.1%   12.6%   5.0%   7.4%  
  Other International   16.1%   18.8%   8.9%   11.2%  
                     
  Total Company   11.4%   14.1%   7.7%   9.2%  
                     
  E-commerce   90.6%   91.3%   49.5%   50.1%  
                     

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

Net income for the fourth quarter was $1.389 billion, or $3.13 per diluted share, compared to $1.097 billion, or $2.47 per diluted share last year. This year’s fourth quarter was negatively impacted by incremental expense related to COVID-19 premium wages and sanitation costs of $281 million pretax ($0.47 per diluted share) and a $36 million pretax charge ($0.06 per diluted share) related to the prepayment of $1.5 billion of debt. These items were partially offset by an $84 million pretax benefit ($0.15 per diluted share) for the partial reversal of a reserve of $123 million pretax ($0.22 cents per diluted share), related to a product tax assessment taken in the fourth quarter of last year.

Net income for the fiscal year was $4.00 billion, or $9.02 per diluted share, compared to $3.66 billion, or $8.26 per diluted share in the prior year.

Costco currently operates 795 warehouses, including 552 in the United States and Puerto Rico, 101 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in Korea, 13 in Taiwan, 12 in Australia, three 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, Japan, and Australia.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, September 24, 2020, 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, COVID-19 related factors and challenges, including among others, the duration of the pandemic, the unknown long-term economic impacts, reduced customer shopping due to illness, travel restrictions or financial hardship, shifts in demand away from discretionary or higher-priced products, reduced workforce due to illness, quarantine, or government mandates, temporary store closures due to reduced workforces or government mandates, or supply-chain disruptions, 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
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
       
  16 Weeks Ended   52 Weeks Ended
  August 30,
2020
  September 1,
2019
  August 30,
2020
  September 1,
2019
REVENUE              
Net sales $ 52,277       $ 46,448       $ 163,220       $ 149,351    
Membership fees 1,106       1,050       3,541       3,352    
Total revenue 53,383       47,498       166,761       152,703    
OPERATING EXPENSES              
Merchandise costs 46,401       41,310       144,939       132,886    
Selling, general and administrative 5,027       4,684       16,332       14,994    
Preopening expenses 26       41       55       86    
Operating income 1,929       1,463       5,435       4,737    
OTHER INCOME (EXPENSE)              
Interest expense (51 )     (45 )     (160 )     (150 )  
Interest income and other, net (9 )     74       92       178    
INCOME BEFORE INCOME TAXES         1,869       1,492       5,367       4,765    
Provision for income taxes 465       382       1,308       1,061    
Net income including noncontrolling interests 1,404       1,110       4,059       3,704    
Net income attributable to noncontrolling interests (15 )     (13 )     (57 )     (45 )  
NET INCOME ATTRIBUTABLE TO COSTCO         $ 1,389       $ 1,097       $ 4,002       $ 3,659    
               
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:              
Basic $ 3.14       $ 2.49       $ 9.05       $ 8.32    
Diluted $ 3.13       $ 2.47       $ 9.02       $ 8.26    
               
Shares used in calculation (000’s):              
Basic 442,843       439,727       442,297       439,755    
Diluted 444,231       443,400       443,901       442,923    
               

 

 

 
COSTCO WHOLESALE CORPORATION
CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
         
Subject to Reclassification        
      August 30,
2020
  September 1,
2019
ASSETS      
  CURRENT ASSETS        
  Cash and cash equivalents   $ 12,277     $ 8,384  
  Short-term investments   1,028     1,060  
  Receivables, net   1,550     1,535  
  Merchandise inventories   12,242     11,395  
  Other current assets   1,023     1,111  
  Total current assets   28,120     23,485  
  OTHER ASSETS        
  Property and equipment, net   21,807     20,890  
  Operating lease right-of-use assets   2,788      
  Other long-term assets   2,841     1,025  
  TOTAL ASSETS   $ 55,556     $ 45,400  
LIABILITIES AND EQUITY      
  CURRENT LIABILITIES        
  Accounts payable   $ 14,172     $ 11,679  
  Accrued salaries and benefits   3,605     3,176  
  Accrued member rewards   1,393     1,180  
  Deferred membership fees   1,851     1,711  
  Current portion of long-term debt   95     1,699  
  Other current liabilities   3,728     3,792  
  Total current liabilities   24,844     23,237  
  OTHER LIABILITIES        
  Long-term debt, excluding current portion   7,514     5,124  
  Long-term operating lease liabilities   2,558      
  Other long-term liabilities   1,935     1,455  
  TOTAL LIABILITIES   36,851     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; 441,255,000 and 439,625,000 shares issued and outstanding   4     4  
  Additional paid-in capital   6,698     6,417  
  Accumulated other comprehensive loss   (1,297 )   (1,436 )
  Retained earnings   12,879     10,258  
  Total Costco stockholders’ equity   18,284     15,243  
  Noncontrolling interests   421     341  
  Total equity   18,705     15,584  
  TOTAL LIABILITIES AND EQUITY   $ 55,556     $ 45,400  
                   
 

 

Source: Costco Wholesale Corporation