SOURCE: Costco

September 29, 2016 16:15 ET

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  

Contact Information

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

    Bob Nelson
    425/313-8255

    Jeff Elliott
    425/313-8264

    David Sherwood
    425/313-8239