8-K
COSTCO WHOLESALE CORP /NEW false 0000909832 0000909832 2020-12-10 2020-12-10

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December 10, 2020

 

 

COSTCO WHOLESALE CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Washington   0-20355   91-1223280

(State or other jurisdiction

of incorporation)

 

(Commission

File No.)

 

(I.R.S. Employer

Identification No.)

999 Lake Drive

Issaquah, WA 98027

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: 425-313-8100

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value $.01 per share   COST   NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition

On December 10, 2020, the Company issued a press release containing its operating results for the first quarter (twelve weeks) of fiscal 2021, ended November 22, 2020. A copy of the press release is included in Item 9.01.    

 

Item 9.01.

Financial Statements and Exhibits

(d) Exhibits. The following exhibit is included in this report:

 

99.1.    Press release dated December 10, 2020.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

2


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized, on December 10, 2020.

 

COSTCO WHOLESALE CORPORATION
By:  

/s/ Richard A. Galanti

  Richard A. Galanti
  Executive Vice President and Chief Financial Officer

 

3

EX-99.1

Exhibit 99.1

 

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COSTCO WHOLESALE CORPORATION REPORTS FIRST     QUARTER

FISCAL YEAR 2021 OPERATING RESULTS

ISSAQUAH, Wash., December 10, 2020 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the first quarter (twelve weeks) of fiscal 2021, ended November 22, 2020.

Net sales for the first quarter increased 16.9 percent, to $42.35 billion from $36.24 billion last year.

Comparable sales for the first quarter fiscal 2021 were as follows:

 

     12 Weeks     12 Weeks  
       Adjusted

U.S.

     14.6     17.0

Canada

     16.2     16.8

Other International

     18.7     17.7

Total Company

     15.4     17.1
  

 

 

   

 

 

 

E-commerce

     86.4     86.2
  

 

 

   

 

 

 

 

*

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

Net income for the quarter was $1,166 million, or $2.62 per diluted share, compared to $844 million, or $1.90 per diluted share, last year. This year’s first quarter included tax benefits of $145 million or $0.33 per diluted share, $0.16 of which was due to the deductibility of the $10 per share special cash dividend, to the extent received by the Company’s 401(k) plan participants; and $0.17 cents related to stock-based compensation. Last year’s first quarter included a $77 million or $0.17 per diluted share tax benefit related to stock-based compensation. This year’s results reflect an expense for COVID-19 premium wages of $212 million pre-tax or $0.35 per diluted share.

Costco currently operates 803 warehouses, including 558 in the United States and Puerto Rico, 102 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in Korea, 14 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, December 10, 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


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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 impact, reduced shopping due to illness, travel restrictions or financial hardship, shifts in demand away from discretionary or higher-priced products, reduced workforces due to illness, quarantine, or government mandates, temporary store closures due to reduced workforces or government mandates, or supply-chain disruptions, capacity constraints of third-party logistics suppliers, 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


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COSTCO WHOLESALE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except per share data)

(unaudited)

 

     12 Weeks Ended  
     November 22, 2020     November 24, 2019  

REVENUE

    

Net sales

   $ 42,347   $ 36,236

Membership fees

     861     804
  

 

 

   

 

 

 

Total revenue

     43,208     37,040

OPERATING EXPENSES

    

Merchandise costs

     37,458     32,233

Selling, general and administrative

     4,298     3,732

Preopening expenses

     22     14
  

 

 

   

 

 

 

Operating income

     1,430     1,061

OTHER INCOME (EXPENSE)

    

Interest expense

     (39     (38

Interest income and other, net

     29     35
  

 

 

   

 

 

 

INCOME BEFORE INCOME TAXES

     1,420     1,058

Provision for income taxes

     239     202
  

 

 

   

 

 

 

Net income including noncontrolling interests

     1,181     856

Net income attributable to noncontrolling interests

     (15     (12
  

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO COSTCO

   $ 1,166   $ 844
  

 

 

   

 

 

 

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:

    

Basic

   $ 2.63   $ 1.91
  

 

 

   

 

 

 

Diluted

   $ 2.62   $ 1.90
  

 

 

   

 

 

 

Shares used in calculation (000’s):

    

Basic

     442,952     441,818

Diluted

     444,386     443,680


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COSTCO WHOLESALE CORPORATION

CONSOLIDATED BALANCE SHEETS

(amounts in millions, except par value and share data)

(unaudited)

Subject to Reclassification

 

     November 22, 2020     August 30, 2020  
ASSETS     

CURRENT ASSETS

    

Cash and cash equivalents

   $ 13,590   $ 12,277

Short-term investments

     833     1,028

Receivables, net

     1,646     1,550

Merchandise inventories

     14,901     12,242

Other current assets

     1,126     1,023
  

 

 

   

 

 

 

Total current assets

     32,096     28,120

OTHER ASSETS

    

Property and equipment, net

     22,288     21,807

Operating lease right-of-use assets

     2,785     2,788

Other long-term assets

     3,048     2,841
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 60,217   $ 55,556
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

CURRENT LIABILITIES

    

Accounts payable

   $ 17,014   $ 14,172

Accrued salaries and benefits

     3,586     3,605

Accrued member rewards

     1,451     1,393

Deferred membership fees

     1,985     1,851

Current portion of long-term debt

     96     95

Other current liabilities

     8,535     3,728
  

 

 

   

 

 

 

Total current liabilities

     32,667     24,844

OTHER LIABILITIES

    

Long-term debt, excluding current portion

     7,529     7,514

Long-term operating lease liabilities

     2,574     2,558

Other long-term liabilities

     2,138     1,935
  

 

 

   

 

 

 

TOTAL LIABILITIES

     44,908     36,851
  

 

 

   

 

 

 

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; 442,955,000 and 441,255,000 shares issued and outstanding

     4     4

Additional paid-in capital

     6,725     6,698

Accumulated other comprehensive loss

     (1,101     (1,297

Retained earnings

     9,232     12,879
  

 

 

   

 

 

 

Total Costco stockholders’ equity

     14,860     18,284

Noncontrolling interests

     449     421
  

 

 

   

 

 

 

TOTAL EQUITY

     15,309     18,705
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 60,217   $ 55,556