ISSAQUAH, Wash., Dec. 13, 2018 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the first quarter (twelve weeks) of fiscal 2019, ended November 25, 2018.
Net sales for the first quarter were $34.31 billion, an increase of 10.3 percent from $31.12 billion during the first quarter last year.
Comparable sales for the first quarter fiscal 2019 were as follows:
| 12 Weeks | 12 Weeks Adjusted* | ||||
| U.S. | 11.0% | 8.3% | |||
| Canada | 2.4% | 5.5% | |||
| Other International | 4.0% | 5.8% | |||
| Total Company | 8.8% | 7.5% | |||
| E-commerce | 32.3% | 26.2% | |||
| *Excluding the impacts from changes in gasoline prices, foreign exchange, and a previously disclosed accounting change concerning revenue recognition (ASC 606). | |||||
Net income for the quarter was $767 million, or $1.73 per diluted share, compared to $640 million, or $1.45 per diluted share, last year. This year’s first quarter benefited from a $59 million ($0.13 per diluted share) tax benefit related to stock-based compensation and a $27 million ($0.06 per diluted share) tax benefit related to implementation of the 2017 Tax Act. In addition, the quarter includes a charge of $43 million ($31 million after-tax, $0.07 per diluted share) for an adjustment to our estimate of breakage on rewards earned prior to Fiscal Year 2019 for the Citi/Visa co-branded credit card program. Last year’s first quarter benefited from a $41 million ($0.09 per diluted share) tax benefit related to stock-based compensation.
Costco currently operates 768 warehouses, including 533 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the United Kingdom, 26 in Japan, 15 in Korea, 13 in Taiwan, 10 in Australia, two in Spain, one in Iceland, and one in France. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, and Taiwan.
A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, December 13, 2018, 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,” “may,” “might,” “likely,” “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 remediate material weaknesses in internal control, 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
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
| 12 Weeks Ended | |||||||
| November 25, 2018 | November 26, 2017 | ||||||
| REVENUE | |||||||
| Net sales | $ | 34,311 | $ | 31,117 | |||
| Membership fees | 758 | 692 | |||||
| Total revenue | 35,069 | 31,809 | |||||
| OPERATING EXPENSES | |||||||
| Merchandise costs | 30,623 | 27,617 | |||||
| Selling, general and administrative | 3,475 | 3,224 | |||||
| Preopening expenses | 22 | 17 | |||||
| Operating income | 949 | 951 | |||||
| OTHER INCOME (EXPENSE) | |||||||
| Interest expense | (36 | ) | (37 | ) | |||
| Interest income and other, net | 22 | 22 | |||||
| INCOME BEFORE INCOME TAXES | 935 | 936 | |||||
| Provision for income taxes | 158 | 285 | |||||
| Net income including noncontrolling interests | 777 | 651 | |||||
| Net income attributable to noncontrolling interests | (10 | ) | (11 | ) | |||
| NET INCOME ATTRIBUTABLE TO COSTCO | $ | 767 | $ | 640 | |||
| NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO: | |||||||
| Basic | $ | 1.75 | $ | 1.46 | |||
| Diluted | $ | 1.73 | $ | 1.45 | |||
| Shares used in calculation (000’s): | |||||||
| Basic | 439,157 | 437,965 | |||||
| Diluted | 442,749 | 440,851 | |||||
| CASH DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.57 | $ | 0.50 | |||
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
| Subject to Reclassifications | |||||||||
| November 25, 2018 | September 2, 2018 | ||||||||
| ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | $ | 6,778 | $ | 6,055 | |||||
| Short-term investments | 1,175 | 1,204 | |||||||
| Receivables, net | 1,795 | 1,669 | |||||||
| Merchandise inventories | 12,205 | 11,040 | |||||||
| Other current assets | 1,001 | 321 | |||||||
| Total current assets | 22,954 | 20,289 | |||||||
| PROPERTY AND EQUIPMENT | |||||||||
| Land | 6,211 | 6,193 | |||||||
| Buildings and improvements | 16,355 | 16,107 | |||||||
| Equipment and fixtures | 7,448 | 7,274 | |||||||
| Construction in progress | 1,130 | 1,140 | |||||||
| 31,144 | 30,714 | ||||||||
| Less accumulated depreciation and amortization | (11,265 | ) | (11,033 | ) | |||||
| Net property and equipment | 19,879 | 19,681 | |||||||
| OTHER ASSETS | 981 | 860 | |||||||
| TOTAL ASSETS | $ | 43,814 | $ | 40,830 | |||||
| LIABILITIES AND EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Accounts payable | $ | 13,133 | $ | 11,237 | |||||
| Accrued salaries and benefits | 2,982 | 2,994 | |||||||
| Accrued member rewards | 1,077 | 1,057 | |||||||
| Deferred membership fees | 1,695 | 1,624 | |||||||
| Other current liabilities | 3,586 | 3,014 | |||||||
| Total current liabilities | 22,473 | 19,926 | |||||||
| LONG-TERM DEBT, excluding current portion | 6,480 | 6,487 | |||||||
| OTHER LIABILITIES | 1,382 | 1,314 | |||||||
| Total liabilities | 30,335 | 27,727 | |||||||
| 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; 440,546,000 and | |||||||||
| 438,189,000 shares issued and outstanding | 4 | 4 | |||||||
| Additional paid-in capital | 6,107 | 6,107 | |||||||
| Accumulated other comprehensive loss | (1,331 | ) | (1,199 | ) | |||||
| Retained earnings | 8,387 | 7,887 | |||||||
| Total Costco stockholders’ equity | 13,167 | 12,799 | |||||||
| Noncontrolling interests | 312 | 304 | |||||||
| Total equity | 13,479 | 13,103 | |||||||
| TOTAL LIABILITIES AND EQUITY | $ | 43,814 | $ | 40,830 | |||||