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May 28, 2020 at 4:15 PM EDT

Costco Wholesale Corporation Reports Third Quarter and Year-To-Date Operating Results for Fiscal 2020

ISSAQUAH, Wash., May 28, 2020 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the third quarter (12 weeks) and the first 36 weeks of fiscal 2020, ended May 10, 2020.

Net sales for the quarter increased 7.3 percent, to $36.45 billion from $33.96 billion last year. Net sales for the first 36 weeks increased 7.8 percent, to $110.94 billion from $102.90 billion last year.

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

                   
    12 Weeks   12 Weeks   36 Weeks   36 Weeks  
        Adjusted*       Adjusted*  
  U.S.  5.9%     8.0%   6.6%   7.1%  
  Canada -2.5%     3.0%   3.1%   5.0%  
  Other International  6.2%   12.2%   5.7%   7.9%  
                   
  Total Company  4.8%     7.8%   6.0%   6.9%  
                   
  E-commerce 64.5%   66.1%   31.8%   32.3%  
                   

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

Reported net income for the third quarter was $838 million, or $1.89 per share, which was negatively impacted by $283 million pretax, or 47 cents per diluted share, from incremental wage and sanitation costs related to COVID-19. Last year's reported third quarter net income was $906 million, or $2.05 per diluted share, which included the benefit of a non-recurring tax item of $73 million, or 16 cents per share.

Net income for the first 36 weeks was $2.61 billion, or $5.89 per diluted share, compared to $2.56 billion, or $5.79 per diluted share, last year.

Costco currently operates 787 warehouses, including 547 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, 12 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, Japan, and Australia.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, May 28, 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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (dollars in millions, except per share data) (unaudited)

  12 Weeks Ended   36 Weeks Ended
  May 10, 2020   May 12, 2019   May 10, 2020   May 12, 2019
REVENUE              
Net sales $ 36,451     $ 33,964     $ 110,943     $ 102,903  
Membership fees 815     776     2,435     2,302  
Total revenue 37,266     34,740     113,378     105,205  
OPERATING EXPENSES              
Merchandise costs 32,249     30,233     98,538     91,576  
Selling, general and administrative 3,830     3,371     11,305     10,310  
Preopening expenses 8     14     29     45  
Operating income 1,179     1,122     3,506     3,274  
OTHER INCOME (EXPENSE)              
Interest expense (37 )   (35 )   (109 )   (105 )
Interest income and other, net 21     36     101     104  
INCOME BEFORE INCOME TAXES 1,163     1,123     3,498     3,273  
Provision for income taxes 311     207     843     679  
Net income including noncontrolling interests 852     916     2,655     2,594  
Net income attributable to noncontrolling interests (14 )   (10 )   (42 )   (32 )
NET INCOME ATTRIBUTABLE TO COSTCO $ 838     $ 906     $ 2,613     $ 2,562  
               
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:              
Basic $ 1.90     $ 2.06     $ 5.91     $ 5.83  
Diluted $ 1.89     $ 2.05     $ 5.89     $ 5.79  
               
Shares used in calculation (000’s):              
Basic 442,322     439,859     442,054     439,767  
Diluted 443,855     442,642     443,754     442,565  
               

 

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 (amounts in millions, except par value and share data) (unaudited)

Subject to Reclassification May 10, 2020   September 1, 2019
  ASSETS      
  CURRENT ASSETS      
  Cash and cash equivalents $ 10,826     $ 8,384  
  Short-term investments 948     1,060  
  Receivables, net 1,507     1,535  
  Merchandise inventories 11,010     11,395  
  Other current assets 963     1,111  
  Total current assets 25,254     23,485  
  PROPERTY AND EQUIPMENT      
  Land 6,684     6,417  
  Buildings and improvements 17,800     17,136  
  Equipment and fixtures 8,549     7,801  
  Construction in progress 1,073     1,272  
  Accumulated depreciation and amortization (12,579 )   (11,736 )
  Net property and equipment 21,527     20,890  
  OTHER ASSETS      
  Operating lease right-of-use assets 2,749      
  Other long-term assets 2,202     1,025  
  TOTAL ASSETS $ 51,732     $ 45,400  
  LIABILITIES AND EQUITY      
  CURRENT LIABILITIES      
  Accounts payable $ 10,813     $ 11,679  
  Accrued salaries and benefits 3,246     3,176  
  Accrued member rewards 1,331     1,180  
  Deferred membership fees 1,832     1,711  
  Current portion of long-term debt 1,497     1,699  
  Other current liabilities 4,060     3,792  
  Total current liabilities 22,779     23,237  
  OTHER LIABILITIES      
  Long-term debt, excluding current portion 7,598     5,124  
  Long-term operating lease liabilities 2,535      
  Other long-term liabilities 1,617     1,455  
  TOTAL LIABILITIES 34,529     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; 441,523,000 and 439,625,000 shares issued and outstanding 4     4  
  Additional paid-in capital 6,593     6,417  
  Accumulated other comprehensive loss (1,678 )   (1,436 )
  Retained earnings 11,883     10,258  
  Total Costco stockholders’ equity 16,802     15,243  
  Noncontrolling interests 401     341  
  TOTAL EQUITY 17,203     15,584  
  TOTAL LIABILITIES AND EQUITY $ 51,732     $ 45,400  
                 
 

 

Source: Costco Wholesale Corporation