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Costco Wholesale Corporation Reports Second Quarter and Year-to-Date Operating Results for Fiscal 2024 and February Sales Results

03/07/2024

ISSAQUAH, Wash., March 07, 2024 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the second quarter (twelve weeks) and the first 24 weeks of fiscal 2024, ended February 18, 2024.

Net sales for the quarter increased 5.7 percent, to $57.33 billion, from $54.24 billion last year. Net sales for the first 24 weeks increased 5.9 percent, to $114.05 billion, from $107.68 billion last year.

Net sales for the Company were negatively impacted by approximately one and one-half percent for the quarter and by approximately one-half percent for the first 24 weeks of fiscal 2024 from the shift of the fiscal calendar, as a result of the fifty-third week last year.

The following comparable sales data reflect comparable locations year-over-year and comparable retail weeks.

Comparable sales for the second quarter and first 24 weeks of fiscal 2024 were as follows:

 12 Weeks 12 Weeks 24 Weeks 24 Weeks
   Adjusted*   Adjusted*
U.S.4.3% 4.8% 3.1% 3.7%
Canada9.2% 9.0% 7.8% 8.6%
Other International8.6% 8.2% 9.8% 7.7%
        
Total Company5.6% 5.8% 4.7% 4.8%
        
E-commerce18.4% 18.2% 12.2% 12.0%

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

Net income for the quarter was $1,743 million, $3.92 per diluted share, compared to $1,466 million, $3.30 per diluted share, last year. This year's second quarter net income was positively impacted by a $94 million ($0.21 per diluted share) tax benefit due to the deductibility of the $15 per share special dividend to the extent received by 401(k) plan participants. Net income for the first 24 weeks was $3.33 billion, $7.49 per diluted share, compared to $2.83 billion, $6.37 per diluted share, last year.

For the four-week reporting month of February, ended March 3, 2024, the Company reported net sales of $18.21 billion, an increase of 6.9 percent from $17.04 billion last year. Net sales for the first 26 weeks were $123.15 billion, an increase of 6.1 percent from $116.06 billion last year.

Comparable sales for the periods ended March 3, 2024, were as follows:

 4 Weeks 4 Weeks 26 Weeks 26 Weeks
   Adjusted*   Adjusted*
U.S.3.4% 4.1% 3.2% 3.8%
Canada8.4% 8.3% 7.9% 8.7%
Other International10.2% 11.3% 9.8% 7.8%
        
Total Company5.0% 5.6% 4.7% 4.9%
        
E-commerce16.2% 16.0% 12.6% 12.4%

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

Costco currently operates 875 warehouses, including 603 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 33 in Japan, 29 in the United Kingdom, 18 in Korea, 15 in Australia, 14 in Taiwan, six in China, four in Spain, two in France, and one each in Iceland, New Zealand and Sweden. 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, March 7, 2024, and is available via a webcast on investor.costco.com (click on “Events & Presentations”).

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, inflation or deflation, 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 and the Ukraine conflict), the ability to maintain effective internal control over financial reporting, regulatory and other impacts related to climate change, public-health related factors, 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. Comparable sales and comparable sales excluding impacts from changes in gasoline prices and foreign exchange are intended as supplemental information and are not a substitute for net sales presented in accordance with GAAP.

CONTACTS: Costco Wholesale Corporation
  David Sherwood, 425/313-8239
  Josh Dahmen, 425/313-8254
  Andrew Yoon, 425/313-6305

COST-Earn
COST-Sales

COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
    
 12 Weeks Ended 24 Weeks Ended
 February 18,
2024
 February 12,
2023
 February 18,
2024
 February 12,
2023
REVENUE       
Net sales$57,331  $54,239  $114,048  $107,676 
Membership fees 1,111   1,027   2,193   2,027 
Total revenue 58,442   55,266   116,241   109,703 
OPERATING EXPENSES       
Merchandise costs 51,140   48,423   101,597   96,192 
Selling, general and administrative 5,240   4,940   10,598   9,857 
Operating income 2,062   1,903   4,046   3,654 
OTHER INCOME (EXPENSE)       
Interest expense (41)  (34)  (79)  (68)
Interest income and other, net 216   114   376   167 
INCOME BEFORE INCOME TAXES 2,237   1,983   4,343   3,753 
Provision for income taxes 494   517   1,011   923 
NET INCOME$1,743  $1,466  $3,332  $2,830 
        
NET INCOME PER COMMON SHARE:       
Basic$3.93  $3.30  $7.51  $6.37 
Diluted$3.92  $3.30  $7.49  $6.37 
        
Shares used in calculation (000s):       
Basic 443,892   443,877   443,859   443,857 
Diluted 444,754   444,475   444,579   444,503 
                


COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassification
 
 February 18, 2024 September 3, 2023
ASSETS   
CURRENT ASSETS   
Cash and cash equivalents$9,095  $13,700 
Short-term investments 1,226   1,534 
Receivables, net 2,779   2,285 
Merchandise inventories 17,075   16,651 
Other current assets 1,971   1,709 
Total current assets 32,146   35,879 
OTHER ASSETS   
Property and equipment, net 27,601   26,684 
Operating lease right-of-use assets 2,740   2,713 
Other long-term assets 3,836   3,718 
TOTAL ASSETS$66,323  $68,994 
LIABILITIES AND EQUITY   
CURRENT LIABILITIES   
Accounts payable$17,494  $17,483 
Accrued salaries and benefits 4,801   4,278 
Accrued member rewards 2,268   2,150 
Deferred membership fees 2,541   2,337 
Current portion of long-term debt 1,080   1,081 
Other current liabilities 6,504   6,254 
Total current liabilities 34,688   33,583 
OTHER LIABILITIES   
Long-term debt, excluding current portion 5,865   5,377 
Long-term operating lease liabilities 2,488   2,426 
Other long-term liabilities 2,522   2,550 
TOTAL LIABILITIES 45,563   43,936 
COMMITMENTS AND CONTINGENCIES   
EQUITY   
Preferred stock $0.005 par value; 100,000,000 shares authorized; no shares issued and outstanding     
Common stock $0.005 par value; 900,000,000 shares authorized; 443,549,000 and 442,793,000 shares issued and outstanding 2   2 
Additional paid-in capital 7,620   7,340 
Accumulated other comprehensive loss (1,842)  (1,805)
Retained earnings 14,980   19,521 
TOTAL EQUITY 20,760   25,058 
TOTAL LIABILITIES AND EQUITY$66,323  $68,994 
        


COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in millions)
(unaudited)
Subject to Reclassification
  
 24 Weeks Ended
 February 18, 2024 February 12, 2023
CASH FLOWS FROM OPERATING ACTIVITIES   
Net income$3,332  $2,830 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization 1,015   917 
Non-cash lease expense 148   216 
Stock-based compensation 580   549 
Impairment of assets and other non-cash operating activities, net (7)  145 
Changes in working capital 314   1,145 
Net cash provided by operating activities 5,382   5,802 
CASH FLOWS FROM INVESTING ACTIVITIES   
Purchases of short-term investments (719)  (396)
Maturities and sales of short-term investments 1,029   512 
Additions to property and equipment (2,071)  (1,947)
Other investing activities, net 9   (34)
Net cash used in investing activities (1,752)  (1,865)
CASH FLOWS FROM FINANCING ACTIVITIES   
Repayments of short-term borrowings (409)  (520)
Proceeds from short-term borrowings 383   479 
Proceeds from issuance of long-term debt 498    
Tax withholdings on stock-based awards (292)  (302)
Repurchases of common stock (322)  (284)
Cash dividend payments (8,012)  (400)
Financing lease payments (94)  (158)
Other financing activities, net (2)  (30)
Net cash used in financing activities (8,250)  (1,215)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 15   45 
Net change in cash and cash equivalents (4,605)  2,767 
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR 13,700   10,203 
CASH AND CASH EQUIVALENTS END OF YEAR$9,095  $12,970 

Source: Costco Wholesale Corporation

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