ISSAQUAH, WA, Oct 08, 2008 (MARKET WIRE via COMTEX News Network) -- Costco Wholesale Corporation (NASDAQ: COST) announced today its
operating results for the 16 weeks (fourth quarter) and the 52 weeks
(fiscal year) ended August 31, 2008, and its September sales results.
Net sales for the 16-week fourth quarter ended August 31, 2008
increased 13%, to $22.63 billion from $20.09 billion during the
16-week fourth quarter ended September 2, 2007. Comparable warehouse
sales during the 16-week fourth quarter of fiscal 2008 increased 9%
over the corresponding 16-week period last year.
Net sales for fiscal 2008, the 52 weeks ended August 31, 2008, were
$70.98 billion, an increase of 13% from $63.09 billion during the
prior 52-week fiscal year ended September 2, 2007. Comparable
warehouse sales increased 8% over the corresponding 52-week period of
the prior year.
16 Weeks 52 Weeks
------------ ------------
US 9% 6%
International 11% 15%
Total Company 9% 8%
============ ============
Excluding gasoline price inflation, U.S. comparable sales would have
been up 6 percent for the 16-week fourth quarter and up 4 percent for
the 52-week fiscal year, both ended August 31, 2008.
Net income for the 16-week fourth quarter of fiscal year 2008 was
$397.8 million, or $.90 per diluted share, compared to net income of
$372.4 million, or $.83 per diluted share, during the fourth quarter
of fiscal 2007. The increase of $.07 per diluted share represents an
increase of 8% year-over-year. The fiscal year 2008 fourth quarter
results were negatively impacted by a non-cash pre-tax LIFO charge of
$32.3 million ($21.2 million, or $.05 per diluted share, after-tax),
primarily resulting from price increases in various food and grocery
items and gasoline in the Company's U.S. merchandise inventories.
The fourth quarter results also include a $15.9 million pre-tax
charge ($10.4 million, or $.02 per diluted share, after-tax) recorded
in connection with a litigation settlement. The fiscal year 2007
fourth quarter results were negatively impacted by a non-recurring,
non-cash pre-tax charge of $56.2 million ($35.8 million, or $.08 per
diluted share, after-tax) to increase the Company's deferred
membership revenue liability (and reduce membership fee revenue).
Excluding these charges, fourth quarter fiscal 2008 net income per
diluted share of $.90 would have been $.07 higher, and the fourth
quarter fiscal 2007 net income per diluted share of $.83 would have
been $.08 higher.
Net income for fiscal 2008 was $1.28 billion, or $2.89 per diluted
share, compared to $1.08 billion, or $2.37 per diluted share, during
fiscal year 2007. Excluding the fourth quarter LIFO charge and
litigation settlement, outlined above, net income per diluted share
for fiscal 2008 would have been $.07 higher. Excluding the
adjustment to membership fee revenue, outlined above, as well as
three additional items recorded in the second and third quarters of
fiscal 2007, which in total aggregated to $188.7 million pre-tax
($119.5 million after-tax), net income per diluted share for fiscal
2007 would have been $.26 higher. Please refer to our annual report
filed on Form 10-K for the fiscal year ended September 2, 2007 for
more information regarding these items.
For the first five weeks of its reporting period ended October 5,
2008, the five-week retail reporting month of September, the Company
reported net sales of $6.67 billion, an increase of 10 percent from
$6.05 billion during the similar five-week period of the prior year.
Comparable sales were as
follows:
5 Weeks
-----------
US 8%
International 2%
Total Company 7%
===========
The five-week U.S. comparable sales figure includes, among other
things, the effect of gasoline price inflation, with the average sales
price per gallon of gasoline up 31 percent, as compared to the
year-earlier September. Excluding gasoline price inflation, U.S.
comparable sales would have been up 6 percent. In addition, foreign
exchange rates negatively impacted international comparable sales
results. On a local currency basis, international comparable sales
increased 8 percent in September.
Costco currently operates 544 warehouses, including 398 in the United
States and Puerto Rico, 76 in Canada, 31 in Mexico, 20 in the United
Kingdom, eight in Japan, six in Korea and five in Taiwan. 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 an additional seven new warehouses prior to the end of
calendar year 2008.
A conference call to discuss these fiscal 2008 fourth quarter and
year-end results is scheduled for 8:00 a.m. (PT) today, October 8,
2008, 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 and workers' compensation costs), rising costs associated with
the acquisition of merchandise (including the direct and indirect
effects of the rising cost of petroleum-based products and fuel and
energy 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
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
16 Weeks 16 Weeks 52 Weeks 52 Weeks
Ended Ended Ended Ended
August 31, September 2, August 31, September 2,
2008 2007 2008 2007
----------- ----------- ----------- -----------
REVENUE
Net sales $22,626,229 $20,089,064 $70,977,484 $63,087,601
Membership fees 473,658 388,196 1,505,536 1,312,554
----------- ----------- ----------- -----------
Total revenue 23,099,887 20,477,260 72,483,020 64,400,155
OPERATING EXPENSES
Merchandise costs 20,298,028 17,931,405 63,502,750 56,449,702
Selling, general and
administrative 2,186,191 1,969,988 6,953,804 6,273,096
Preopening expenses 17,765 15,928 57,383 55,163
Provision for impaired
assets and closing
costs, net (6,171) 4,886 248 13,608
----------- ----------- ----------- -----------
Operating income 604,074 555,053 1,968,835 1,608,586
OTHER INCOME (EXPENSE)
Interest expense (32,057) (32,303) (102,636) (64,079)
Interest income and
other 35,006 59,009 132,775 165,484
----------- ----------- ----------- -----------
INCOME BEFORE INCOME
TAXES 607,023 581,759 1,998,974 1,709,991
Provision for income
taxes 209,195 209,337 716,249 627,219
----------- ----------- ----------- -----------
NET INCOME $ 397,828 $ 372,422 $ 1,282,725 $ 1,082,772
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE:
Basic $ 0.92 $ 0.85 $ 2.95 $ 2.42
=========== =========== =========== ===========
Diluted $ 0.90 $ 0.83 $ 2.89 $ 2.37
=========== =========== =========== ===========
Shares used in calculation (000's)
Basic 434,282 438,449 434,442 447,659
Diluted 443,874 448,733 444,240 457,641
Dividends per share $ 0.160 $ 0.145 $ 0.61 $ 0.55
CONTACTS:
Costco Wholesale Corporation
Richard Galanti, 425/313-8203
Bob Nelson, 425/313-8255
Jeff Elliott, 425/313-8264
SOURCE: Costco