Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2016 Operating Results

ISSAQUAH, WA--(Marketwired - Sep 29, 2016) -  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 28, 2016.

Net sales for the fourth quarter were $35.73 billion, an increase of two percent from $34.99 billion in fiscal 2015. Net sales for the fiscal year were $116.07 billion, an increase of two percent from $113.67 billion last year.

Comparable sales were as follows:

				16 Weeks			52 Weeks
	U.S.			-1	%		1	%
	Canada			2	%		-3	%
	Other International			-2	%		-3	%
		Total Company		0	%		0	%

Comparable sales for these periods excluding the negative impacts from gasoline price deflation and foreign exchange were as follows:

				16 Weeks			52 Weeks
	U.S.			2	%		3	%
	Canada			5	%		8	%
	Other International			1	%		4	%
		Total Company		3	%		4	%

Net income for the fourth quarter was $779 million, or $1.77 per diluted share, compared to $767 million, or $1.73 per diluted share, last year. 

Net income for the fiscal year was $2.35 billion, or $5.33 per diluted share, compared to $2.38 billion, or $5.37 per diluted share, last year. Net income last year was positively impacted by a $57 million ($.13 per diluted share) tax benefit in connection with a second-quarter special cash dividend.

Costco ended its 2016 fiscal year and currently operates 715 warehouses, including 501 in the United States and Puerto Rico, 91 in Canada, 36 in Mexico, 28 in the United Kingdom, 25 in Japan, 12 in Korea, 12 in Taiwan, eight in Australia and two in Spain. The Company plans to open up to an additional nine new warehouses (including one relocation) before the end of calendar year 2016. Costco also operates e-commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.

A conference call to discuss these fiscal 2016 fourth quarter and year-end operating results is scheduled for 2:00 p.m. (PT) today, September 29, 2016, 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 CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
				16 Weeks Ended				16 Weeks Ended				52 Weeks Ended				52 Weeks Ended
				August 28, 2016				August 30, 2015				August 28, 2016				August 30, 2015
REVENUE
	Net sales			$	35,728			$	34,993			$	116,073			$	113,666
	Membership fees				832				785				2,646				2,533
		Total revenue			36,560				35,778				118,719				116,199
OPERATING EXPENSES
	Merchandise costs				31,649				31,096				102,901				101,065
	Selling, general and administrative				3,696				3,499				12,068				11,445
	Preopening expenses				24				27				78				65
		Operating income			1,191				1,156				3,672				3,624
OTHER INCOME (EXPENSE)
	Interest expense				(39	)			(40	)			(133	)			(124	)
	Interest income and other, net				29				40				80				104
INCOME BEFORE INCOME TAXES					1,181				1,156				3,619				3,604
	Provision for income taxes				396				378				1,243				1,195
	Net income including noncontrolling interests				785				778				2,376				2,409
	Net income attributable to noncontrolling interests				(6	)			(11	)			(26	)			(32	)
NET INCOME ATTRIBUTABLE TO COSTCO				$	779			$	767			$	2,350			$	2,377
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:
	Basic			$	1.78			$	1.75			$	5.36			$	5.41
	Diluted			$	1.77			$	1.73			$	5.33			$	5.37
Shares used in calculation: (000's)
	Basic				437,809				438,835				438,585				439,455
	Diluted				440,868				442,404				441,263				442,716
Cash dividends declared per common share				$	0.45			$	0.40			$	1.70			$	6.51

COSTCO WHOLESALE CORPORATION
CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)
Subject to Reclassifications
				August 28,  2016				August 30,  2015
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	3,379			$	4,801
	Short-term investments				1,350				1,618
	Receivables, net				1,252				1,224
	Merchandise inventories				8,969				8,908
	Other current assets				268				228
		Total current assets			15,218				16,779
PROPERTY AND EQUIPMENT
	Land				5,395				4,961
	Buildings and improvements				13,994				12,618
	Equipment and fixtures				6,077				5,274
	Construction in progress				701				811
					26,167				23,664
	Less accumulated depreciation and amortization				(9,124	)			(8,263	)
		Net property and equipment			17,043				15,401
OTHER ASSETS					902				837
		TOTAL ASSETS		$	33,163			$	33,017
LIABILITIES AND EQUITY
CURRENT LIABILITIES
	Accounts payable			$	7,612			$	9,011
	Current portion of long-term debt				1,100				1,283
	Accrued salaries and benefits				2,629				2,468
	Accrued member rewards				869				813
	Deferred membership fees				1,362				1,269
	Other current liabilities				2,003				1,695
		Total current liabilities			15,575				16,539
LONG-TERM DEBT, excluding current portion					4,061				4,852
OTHER LIABILITIES					1,195				783
		Total liabilities			20,831				22,174
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; 437,524,000 and 437,952,000 shares issued and outstanding				2				2
	Additional paid-in capital				5,490				5,218
	Accumulated other comprehensive loss				(1,099	)			(1,121	)
	Retained earnings				7,686				6,518
		Total Costco stockholders' equity			12,079				10,617
	Noncontrolling interests				253				226
		Total equity			12,332				10,843
		TOTAL LIABILITIES AND EQUITY		$	33,163			$	33,017