8-K
COSTCO WHOLESALE CORP /NEW false 0000909832 0000909832 2021-09-23 2021-09-23

 

 

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): September 23, 2021

 

 

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 September 23, 2021, the Company issued a press release containing its operating results for the 16-week fourth quarter and the 52-week fiscal year, ended August 29, 2021. 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 September 23, 2021.

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 September 23, 2021.

 

COSTCO WHOLESALE CORPORATION
By:  

/s/ Richard A. Galanti

  Richard A. Galanti
  Executive Vice President and Chief Financial Officer

 

2

EX-99.1

Exhibit 99.1

 

 

 

Press Release

 

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COSTCO WHOLESALE CORPORATION REPORTS FOURTH QUARTER AND FISCAL

YEAR 2021 OPERATING RESULTS

ISSAQUAH, Wash., September 23, 2021 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the 16-week fourth quarter and the 52-week fiscal year, ended August 29, 2021.

Net sales for the quarter increased 17.5 percent, to $61.44 billion from $52.28 billion last year. Net sales for the fiscal year increased 17.7 percent, to $192.05 billion from $163.22 billion last year.

Comparable sales for the fourth quarter and the fiscal year were as follows:

 

     16 Weeks     16 Weeks     52 Weeks     52 Weeks  
           Adjusted*           Adjusted*  

U.S.

     14.9     10.3     14.8     13.6

Canada

     19.5     6.7     20.0     12.1

Other International

     15.0     7.3     19.1     13.4

Total Company

     15.5     9.4     16.0     13.4
  

 

 

   

 

 

   

 

 

   

 

 

 

E-commerce

     11.2     8.9     44.4     42.6
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*

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

Net income for the fourth quarter was $1.670 billion, or $3.76 per diluted share, compared to $1.389 billion, or $3.13 last year. This year’s fourth quarter was negatively impacted by a write-off of certain information technology assets of $84 million pre-tax ($0.14 per diluted share). Last year’s fourth quarter was negatively impacted by incremental expense related to COVID-19 premium wages and sanitation costs of $281 million pretax ($0.47 per diluted share) and a $36 million pretax charge ($0.06 per diluted share) related to the prepayment of $1.5 billion of debt, partially offset by an $84 million pretax benefit ($0.15 per diluted share) for the partial reversal of a reserve related to a product tax assessment taken in fiscal year 2019.

Net income for the fiscal year was $5.01 billion, or $11.27 per diluted share, compared to $4.00 billion, or $9.02 per diluted share in the prior year.

Costco currently operates 817 warehouses, including 565 in the United States and Puerto Rico, 105 in Canada, 39 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 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, September 23, 2021, 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,”


 

 

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“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), 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 for products, reduced workforces due to illness, quarantine, or government mandates, temporary store closures or operational limitations due to 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


 

 

Press Release

  

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COSTCO WHOLESALE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except per share data)

(unaudited)

 

     16 Weeks Ended     52 Weeks Ended  
     August 29,
2021
    August 30,
2020
    August 29,
2021
    August 30,
2020
 

REVENUE

        

Net sales

   $ 61,441   $ 52,277   $ 192,052   $ 163,220

Membership fees

     1,234     1,106     3,877     3,541
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     62,675     53,383     195,929     166,761

OPERATING EXPENSES

        

Merchandise costs

     54,733     46,401     170,684     144,939

Selling, general and administrative

     5,632     5,027     18,461     16,332

Preopening expenses

     35     26     76     55
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     2,275     1,929     6,708     5,435

OTHER INCOME (EXPENSE)

        

Interest expense

     (52     (51     (171     (160

Interest income and other, net

     68     (9     143     92
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME BEFORE INCOME TAXES

     2,291     1,869     6,680     5,367

Provision for income taxes

     597     465     1,601     1,308
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income including noncontrolling interests

     1,694     1,404     5,079     4,059

Net income attributable to noncontrolling interests

     (24     (15     (72     (57
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO COSTCO

   $ 1,670   $ 1,389   $ 5,007   $ 4,002
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:

        

Basic

   $ 3.77   $ 3.14   $ 11.30   $ 9.05
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 3.76   $ 3.13   $ 11.27   $ 9.02
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in calculation (000’s):

        

Basic

     443,193     442,843     443,089     442,297

Diluted

     444,369     444,231     444,346     443,901


 

 

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COSTCO WHOLESALE CORPORATION

CONSOLIDATED BALANCE SHEETS

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

(unaudited)

Subject to Reclassification

 

     August 29,
2021
    August 30,
2020
 

ASSETS

    

CURRENT ASSETS

    

Cash and cash equivalents

   $ 11,258   $ 12,277

Short-term investments

     917     1,028

Receivables, net

     1,803     1,550

Merchandise inventories

     14,215     12,242

Other current assets

     1,312     1,023
  

 

 

   

 

 

 

Total current assets

     29,505     28,120

OTHER ASSETS

    

Property and equipment, net

     23,492     21,807

Operating lease right-of-use assets

     2,890     2,788

Other long-term assets

     3,381     2,841
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 59,268   $ 55,556
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

CURRENT LIABILITIES

    

Accounts payable

   $ 16,278   $ 14,172

Accrued salaries and benefits

     4,090     3,605

Accrued member rewards

     1,671     1,393

Deferred membership fees

     2,042     1,851

Current portion of long-term debt

     799     95

Other current liabilities

     4,561     3,728
  

 

 

   

 

 

 

Total current liabilities

     29,441     24,844

OTHER LIABILITIES

    

Long-term debt, excluding current portion

     6,692     7,514

Long-term operating lease liabilities

     2,642     2,558

Other long-term liabilities

     2,415     1,935
  

 

 

   

 

 

 

TOTAL LIABILITIES

     41,190     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; 441,825,000 and 441,255,000 shares issued and outstanding

     4     4

Additional paid-in capital

     7,031     6,698

Accumulated other comprehensive loss

     (1,137     (1,297

Retained earnings

     11,666     12,879
  

 

 

   

 

 

 

Total Costco stockholders’ equity

     17,564     18,284

Noncontrolling interests

     514     421
  

 

 

   

 

 

 

TOTAL EQUITY

     18,078     18,705
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 59,268   $ 55,556