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Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal Year 2010
ISSAQUAH, WA, May 27, 2010 (MARKETWIRE via COMTEX) --Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) announced today its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2010. Net sales for the third quarter of fiscal 2010 increased twelve percent, to $17.39 billion, from $15.48 billion during the third quarter of fiscal 2009. Net sales for the first thirty-six weeks of fiscal 2010 increased ten percent, to $52.66 billion, from $48.00 billion during the first thirty-six weeks of fiscal 2009.
Comparable sales for the third quarter (12 weeks) and the first thirty-six weeks of fiscal 2010 were as follows:
12 Weeks 36 Weeks
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U.S. 6% 4%
International 26% 21%
Total 10% 7%
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Comparable sales for the 12-week and 36-week periods, excluding the positive impacts from gasoline inflation and the strengthening of foreign currencies (primarily in Canada, the United Kingdom and Korea), were as follows:
12 Weeks 36 Weeks
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U.S. 3% 2%
International 8% 9%
Total 4% 3%
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Net income for the third quarter of fiscal 2010 was $306 million, or $.68 per diluted share, compared to $210 million, or $.48 per diluted share, during the third quarter of fiscal 2009. Net income for the first thirty-six weeks of fiscal 2010 was $871 million, or $1.95 per diluted share, compared to net income for the first thirty-six weeks of fiscal 2009 of $712 million or $1.62 per diluted share.
Third quarter results this year were positively affected by a partial reversal in the amount of $14 million (pre-tax) of a charge related to a Canadian tax liability, previously taken in the second quarter of fiscal 2007. Third quarter results last year were negatively impacted by a pretax charge of $34 million (pre-tax and mostly non-cash) related to a litigation settlement concerning our membership renewal policy.
Costco currently operates 568 warehouses, including 414 in the United States and Puerto Rico, 78 in Canada, 21 in the United Kingdom, seven in Korea, six in Taiwan, nine in Japan, one in Australia and 32 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com and at www.costco.ca in Canada. The Company plans to open up to five new warehouses prior to the end of its 2010 fiscal year on August 29, 2010.
A conference call to discuss these third quarter operating results is scheduled for 8:00 a.m. (PT) today, May 27, 2010, 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, conditions affecting the acquisition, development, ownership or use of real estate, actions of vendors, rising costs associated with employees (including health care costs), 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.
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
12 Weeks Ended 36 Weeks Ended
-------------------- --------------------
May 9, May 10, May 9, May 10,
2010 2009 2010 2009
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REVENUE
Net sales $ 17,385 $ 15,477 $ 52,663 $ 48,001
Membership fees 395 329 1,158 1,043
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Total revenue 17,780 15,806 53,821 49,044
OPERATING EXPENSES
Merchandise costs 15,494 13,776 46,971 42,823
Selling, general and
administrative 1,789 1,655 5,439 4,998
Preopening expenses 3 9 17 29
Provision for impaired assets
and closing costs, net 3 7 5 15
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Operating income 491 359 1,389 1,179
OTHER INCOME (EXPENSE)
Interest expense (27) (25) (77) (75)
Interest income and other,
net 10 6 58 39
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INCOME BEFORE INCOME TAXES 474 340 1,370 1,143
Provision for income taxes 163 128 484 422
--------- --------- --------- ---------
Net income including
noncontrolling interests 311 212 886 721
Net income attributable to
noncontrolling interests (5) (2) (15) (9)
--------- --------- --------- ---------
NET INCOME ATTRIBUTABLE TO
COSTCO $ 306 $ 210 $ 871 $ 712
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NET INCOME PER COMMON SHARE
ATTRIBUTABLE TO COSTCO:
Basic $ 0.69 $ 0.48 $ 1.98 $ 1.64
========= ========= ========= =========
Diluted $ 0.68 $ 0.48 $ 1.95 $ 1.62
========= ========= ========= =========
Shares used in calculation
(000's)
Basic 440,973 434,354 439,306 433,426
Diluted 448,391 439,997 446,709 439,995
Dividends per share $ 0.205 $ 0.180 $ 0.565 $ 0.500
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
Subject to Reclassifications
May 9, August 30,
2010 2009
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ASSETS
Cash and cash equivalents $ 4,413 $ 3,157
Short-term investments 854 570
Receivables, net 818 834
Merchandise inventories 5,546 5,405
Deferred income taxes and other current assets 426 371
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Total current assets 12,057 10,337
Property and equipment, net 11,058 10,900
Other assets 784 742
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TOTAL ASSETS $ 23,899 $ 21,979
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LIABILITIES AND EQUITY
Accounts payable $ 5,975 $ 5,450
Short-term borrowings and current portion of
long-term debt 30 96
Other current liabilities 4,184 3,735
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Total current liabilities 10,189 9,281
Long-term debt, excluding current portion 2,132 2,130
Deferred income taxes and other liabilities 606 464
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Total liabilities 12,927 11,875
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Total Costco stockholders' equity 10,874 10,024
Noncontrolling interests 98 80
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Total equity 10,972 10,104
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TOTAL LIABILITIES AND EQUITY $ 23,899 $ 21,979
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CONTACTS:
Costco Wholesale Corporation
Richard Galanti
425/313-8203
Bob Nelson
425/313-8255
Jeff Elliott
425/313-8264
SOURCE: Costco