Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal Year 2017
May 25 2017 - 3:15PM
Costco Wholesale Corporation (“Costco” or the “Company”)
(Nasdaq:COST) today announced its operating results for the third
quarter (twelve weeks) and first thirty-six weeks of fiscal 2017,
ended May 7, 2017.
Net sales for the quarter increased eight
percent, to $28.22 billion from $26.15 billion last year. Net
sales for the first thirty-six weeks increased six percent, to
$84.82 billion from $80.34 billion last year.
Comparable sales for the twelve-week and
thirty-six-week periods were as follows:
|
|
12 Weeks |
|
36 Weeks |
U.S. |
|
6 |
% |
|
3 |
% |
Canada |
|
2 |
% |
|
5 |
% |
Other
International |
|
4 |
% |
|
0 |
% |
|
|
|
|
|
Total
Company |
|
5 |
% |
|
3 |
% |
Comparable sales for these periods excluding the
impacts from changes in gasoline prices and foreign exchange were
as follows:
|
|
12 Weeks |
|
36 Weeks |
U.S. |
|
5 |
% |
|
3 |
% |
Canada |
|
3 |
% |
|
3 |
% |
Other
International |
|
6 |
% |
|
4 |
% |
|
|
|
|
|
Total
Company |
|
5 |
% |
|
3 |
% |
Net income for the quarter was $700 million, or
$1.59 per diluted share, compared to $545 million, or $1.24 per
diluted share, last year. Net income was positively impacted
by an $82 million ($0.19 per diluted share) tax benefit in
connection with the $7.00 per share special cash dividend announced
on April 25, 2017, to the extent to be received by the Company’s
401(k) plan participants. Net income for the thirty six weeks
was $1.76 billion, or $3.99 per diluted share, compared to $1.57
billion, or $3.56 per diluted share, last year.
Costco currently operates 732 warehouses,
including 510 in the United States and Puerto Rico, 95 in Canada,
37 in Mexico, 28 in the United Kingdom, 25 in Japan, 13 in Korea,
13 in Taiwan, eight in Australia, two in Spain and one in Iceland.
Costco also operates electronic commerce web sites in the
U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.
A conference call to discuss these fiscal 2017 third quarter
operating results is scheduled for 2:00 p.m. (PT) on May 25, 2017,
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, 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
(including health care costs), energy and certain commodities,
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. Forward-looking
statements speak only as of the date they are made, and we do not
undertake to update these statements, except as required by
law.
COSTCO WHOLESALE
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
INCOME (dollars in millions, except per share
data)(unaudited) |
|
|
|
|
|
|
|
|
|
|
12 Weeks Ended |
|
|
36 Weeks Ended |
|
|
|
May 7, 2017 |
|
|
May 8, 2016 |
|
|
May 7, 2017 |
|
|
May 8, 2016 |
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
28,216 |
|
|
$ |
26,151 |
|
|
$ |
84,815 |
|
|
$ |
80,345 |
|
Membership fees |
|
|
644 |
|
|
|
618 |
|
|
|
1,910 |
|
|
|
1,814 |
|
Total
revenue |
|
|
28,860 |
|
|
|
26,769 |
|
|
|
86,725 |
|
|
|
82,159 |
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Merchandise costs |
|
|
24,970 |
|
|
|
23,162 |
|
|
|
75,185 |
|
|
|
71,252 |
|
Selling,
general and administrative |
|
|
2,907 |
|
|
|
2,731 |
|
|
|
8,827 |
|
|
|
8,372 |
|
Preopening expenses |
|
|
15 |
|
|
|
18 |
|
|
|
52 |
|
|
|
54 |
|
Operating
income |
|
|
968 |
|
|
|
858 |
|
|
|
2,661 |
|
|
|
2,481 |
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
(21 |
) |
|
|
(30 |
) |
|
|
(81 |
) |
|
|
(94 |
) |
Interest
income and other, net |
|
|
18 |
|
|
|
7 |
|
|
|
40 |
|
|
|
51 |
|
INCOME BEFORE
INCOME TAXES |
|
|
965 |
|
|
|
835 |
|
|
|
2,620 |
|
|
|
2,438 |
|
Provision
for income taxes |
|
|
259 |
|
|
|
286 |
|
|
|
838 |
|
|
|
847 |
|
Net
income including noncontrolling interests |
|
|
706 |
|
|
|
549 |
|
|
|
1,782 |
|
|
|
1,591 |
|
Net
income attributable to noncontrolling interests
|
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(22 |
) |
|
|
(20 |
) |
NET INCOME
ATTRIBUTABLE TO COSTCO |
|
$ |
700 |
|
|
$ |
545 |
|
|
$ |
1,760 |
|
|
$ |
1,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER
COMMON SHARE ATTRIBUTABLE TO
COSTCO: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.59 |
|
|
$ |
1.24 |
|
|
$ |
4.01 |
|
|
$ |
3.58 |
|
Diluted |
|
$ |
1.59 |
|
|
$ |
1.24 |
|
|
$ |
3.99 |
|
|
$ |
3.56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
used in calculation (000’s): |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
438,817 |
|
|
|
438,815 |
|
|
|
438,650 |
|
|
|
438,930 |
|
Diluted |
|
|
441,056 |
|
|
|
441,066 |
|
|
|
440,745 |
|
|
|
441,321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share |
|
$ |
7.50 |
|
|
$ |
0.45 |
|
|
$ |
8.40 |
|
|
$ |
1.25 |
|
COSTCO WHOLESALE
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS (amounts in millions, except par value
and share data)(unaudited)
Subject to Reclassifications |
|
|
|
|
|
May 7, 2017 |
|
August 28, 2016 |
ASSETS |
|
|
|
CURRENT
ASSETS |
|
|
|
Cash and
cash equivalents |
$ |
4,538 |
|
|
$ |
3,379 |
|
Short-term investments |
1,187 |
|
|
1,350 |
|
Receivables, net |
1,462 |
|
|
1,252 |
|
Merchandise inventories |
9,736 |
|
|
8,969 |
|
Other
current assets |
333 |
|
|
268 |
|
Total
current assets |
17,256 |
|
|
15,218 |
|
PROPERTY AND
EQUIPMENT |
|
|
|
Land |
5,505 |
|
|
5,395 |
|
Buildings
and improvements |
14,509 |
|
|
13,994 |
|
Equipment
and fixtures |
6,507 |
|
|
6,077 |
|
Construction in progress |
803 |
|
|
701 |
|
|
27,324 |
|
|
26,167 |
|
Less
accumulated depreciation and amortization |
(9,789 |
) |
|
(9,124 |
) |
Net
property and equipment |
17,535 |
|
|
17,043 |
|
OTHER
ASSETS |
840 |
|
|
902 |
|
TOTAL ASSETS |
$ |
35,631 |
|
|
$ |
33,163 |
|
LIABILITIES AND EQUITY |
|
|
|
CURRENT
LIABILITIES |
|
|
|
Accounts
payable |
$ |
9,425 |
|
|
$ |
7,612 |
|
Current
portion of long-term debt |
1,158 |
|
|
1,100 |
|
Accrued
salaries and benefits |
2,514 |
|
|
2,629 |
|
Accrued
member rewards |
923 |
|
|
869 |
|
Deferred
membership fees |
1,479 |
|
|
1,362 |
|
Other
current liabilities |
5,895 |
|
|
2,003 |
|
Total
current liabilities |
21,394 |
|
|
15,575 |
|
LONG-TERM DEBT,
excluding current portion |
2,821 |
|
|
4,061 |
|
OTHER
LIABILITIES |
1,231 |
|
|
1,195 |
|
Total
liabilities |
25,446 |
|
|
20,831 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
EQUITY |
|
|
|
Preferred
stock $.005 par value; 100,000,000 shares authorized; no shares
issued and outstanding |
0 |
|
|
0 |
|
Common
stock $.005 par value; 900,000,000 shares authorized; 438,679,000
and 437,524,000 shares issued and outstanding |
2 |
|
|
2 |
|
Additional paid-in capital |
5,709 |
|
|
5,490 |
|
Accumulated other comprehensive loss |
(1,321 |
) |
|
(1,099 |
) |
Retained
earnings |
5,508 |
|
|
7,686 |
|
Total
Costco stockholders’ equity |
9,898 |
|
|
12,079 |
|
Noncontrolling interests |
287 |
|
|
253 |
|
Total
equity |
10,185 |
|
|
12,332 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
35,631 |
|
|
$ |
33,163 |
|
CONTACTS: Costco Wholesale Corporation
Richard Galanti, 425/313-8203, Bob Nelson, 425/313-8255, David Sherwood, 425/313-8239
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