SOURCE: Costco

October 08, 2014 03:01 ET

Costco Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2014 Operating Results and September Sales Results

ISSAQUAH, WA--(Marketwired - Oct 8, 2014) - 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 31, 2014, and its September sales results for the five weeks ended October 5, 2014.

Net sales for the fourth quarter were $34.75 billion, an increase of nine percent from $31.77 billion in fiscal 2013. Net sales for the fiscal year were $110.21 billion, an increase of seven percent from $102.87 billion last year.

Comparable sales were as follows:

         
         
    16 Weeks   52 Weeks
U.S.  
6%
 
5%
International   6%   3%
         
Total Company   6%   4%
         

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

         
    16 Weeks   52 Weeks
U.S.  
6%
 
5%
International   8%   7%
         
Total Company   7%   6%
         

Net income for the fourth quarter was $697 million, or $1.58 per diluted share, compared to $617 million, or $1.40 per diluted share, last year. Net income for the fiscal year was $2.06 billion, or $4.65 per diluted share, compared to $2.04 billion, or $4.63 per diluted share, in fiscal year 2013. Net income last year was positively impacted by a $62 million ($.14 per diluted share) tax benefit in connection with the portion of the special cash dividend paid in December 2012 to the Company 401(k) plan participants.

For the five-week reporting month of September, ended October 5, 2014, the Company reported net sales of $10.57 billion, an increase of seven percent from $9.86 billion during the similar five-week period last year.

Comparable sales for the five-week period ended October 5, 2014, were as follows:

     
    5 Weeks
U.S.  
5%
International   2%
     
Total Company   4%
     

Comparable sales for the five-week period, excluding negative impacts from gasoline price deflation and foreign exchange, were as follows:

     
    5 Weeks
U.S.  
6%
International   6%
     
Total Company   6%
     

Costco currently operates 664 warehouses, including 469 in the United States and Puerto Rico, 88 in Canada, 33 in Mexico, 26 in the United Kingdom, 20 in Japan, 11 in Korea, 10 in Taiwan, six in Australia and one in Spain. The Company plans to open up to an additional eight new warehouses (including one relocation) before the end of calendar year 2014. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.

A conference call to discuss these fiscal 2014 fourth quarter and year-end operating results and September sales is scheduled for 8:00 a.m. (PT) today, October 8, 2014, 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, amounts expected to be spent on expansion plans, 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.

   
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 31, 2014     September 1, 2013     August 31, 2014     September 1, 2013  
REVENUE                                
  Net sales   $ 34,755     $ 31,771     $ 110,212     $ 102,870  
  Membership fees     768       716       2,428       2,286  
    Total revenue     35,523       32,487       112,640       105,156  
OPERATING EXPENSES                                
  Merchandise costs     31,037       28,418       98,458       91,948  
  Selling, general and administrative     3,380       3,098       10,899       10,104  
  Preopening expenses     15       17       63       51  
    Operating income     1,091       954       3,220       3,053  
OTHER INCOME (EXPENSE)                                
  Interest expense     (35 )     (36 )     (113 )     (99 )
  Interest income and other, net     30       36       90       97  
INCOME BEFORE INCOME TAXES     1,086       954       3,197       3,051  
  Provision for income taxes     381       332       1,109       990  
Net income including noncontrolling interests     705       622       2,088       2,061  
Net income attributable to noncontrolling interests     (8 )     (5 )     (30 )     (22 )
NET INCOME ATTRIBUTABLE TO COSTCO   $ 697     $ 617     $ 2,058     $ 2,039  
                                 
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:                                
  Basic   $ 1.59     $ 1.41     $ 4.69     $ 4.68  
  Diluted   $ 1.58     $ 1.40     $ 4.65     $ 4.63  
                                 
Shares used in calculation (000's)                                
  Basic     437,875       436,752       438,693       435,741  
  Diluted     441,887       441,907       442,485       440,512  
                                 
                                 
                                 
Cash dividends declared per common share   $ 0.355     $ 0.31     $ 1.33     $ 8.17  
                                 
 
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
 
Subject to Reclassifications
    August 31, 2014   September 1, 2013
ASSETS        
  Cash and cash equivalents   $ 5,738   $ 4,644
  Short-term investments     1,577     1,480
  Receivables, net     1,148     1,201
  Merchandise inventories     8,456     7,894
  Deferred income taxes and other current assets     669     621
    Total current assets     17,588     15,840
  Property and equipment, net     14,830     13,881
  Other assets     606     562
  TOTAL ASSETS   $ 33,024   $ 30,283
             
LIABILITIES AND EQUITY            
             
  Accounts payable   $ 8,491   $ 7,872
  Accrued salaries and benefits     2,231     2,037
  Deferred membership fees     1,254     1,167
  Other current liabilities     2,436     2,181
    Total current liabilities     14,412     13,257
  Long-term debt, excluding current portion     5,093     4,998
  Deferred income taxes and other liabilities     1,004     1,016
    Total liabilities     20,509     19,271
             
  Total Costco stockholders' equity     12,303     10,833
  Noncontrolling interests     212     179
    Total equity     12,515     11,012
  TOTAL LIABILITIES AND EQUITY   $ 33,024   $ 30,283
               

Contact Information

  • CONTACTS:
    Costco Wholesale Corporation
    Richard Galanti
    425/313-8203

    Bob Nelson
    425/313-8255

    Jeff Elliott
    425/313-8264