SOURCE: Costco

March 05, 2015 03:01 ET

Costco Wholesale Corporation Reports Second Quarter and Year-to-Date Operating Results for Fiscal 2015 and February Sales Results

ISSAQUAH, WA--(Marketwired - Mar 5, 2015) - Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) announced today its operating results for the second quarter (twelve weeks) and first half (24 weeks) of fiscal 2015, ended February 15, 2015.

Net sales for the quarter increased four percent, to $26.87 billion, from $25.76 billion last year. Net sales for the first half increased six percent, to $53.16 billion, from $50.22 billion last year.

Comparable sales for the twelve-week and twenty-four-week periods were as follows:

       
  12 Weeks   24 Weeks
U.S. 4%   5%
International -2%   -1%
       
Total 2%   3%

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

       
  12 Weeks   24 Weeks
U.S. 8%   8%
International 8%   7%
       
Total 8%   7%

Net income for the quarter was $598 million, or $1.35 per diluted share, compared to $463 million, or $1.05 per diluted share, last year. Net income for the first half was $1,094 million, or $2.47 per diluted share, compared to $888 million, or $2.01 per diluted share, last year.

According to Richard Galanti, Chief Financial Officer: "Net income was positively impacted by a $57 million ($0.13 per diluted share) tax benefit in connection with February's special cash dividend to the extent received by the Company 401(k) plan participants. In addition, this quarter's net income was negatively impacted by a $14 million ($0.03 per diluted share) tax charge relating to an ongoing income tax matter."

For the four-week reporting month of February ended March 1, 2015, the Company reported net sales of $8.18 billion, an increase of four percent from $7.90 billion during the similar four-week period last year. For the twenty-six week year-to-date period ended March 1, 2015, net sales were $57.19 billion, an increase of five percent from $54.22 billion during the similar twenty-six week period last year.

Comparable sales for the four-week and twenty-six-week periods ended March 1, 2015 were as follows:

       
  4 Weeks   26 Weeks
U.S. 2%   5%
International 0%   -1%
       
Total 1%   3%

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

       
  4 Weeks   26 Weeks
U.S. 7%   7%
International 12%   8%
       
Total 8%   7%

Costco currently operates 671 warehouses, including 474 in the United States and Puerto Rico, 88 in Canada, 34 in Mexico, 26 in the United Kingdom, 20 in Japan, 11 in Korea, 10 in Taiwan, seven in Australia and one in Spain. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.

A conference call to discuss these second quarter operating results and February sales results is scheduled for 8:00 a.m. (PT) today, March 5, 2015, 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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
 
    12 Weeks Ended     24 Weeks Ended  
    February 15,
2015
    February 16,
2014
    February 15,
2015
    February 16,
2014
 
REVENUE                                
  Net sales   $ 26,872     $ 25,756     $ 53,156     $ 50,224  
  Membership fees     582       550       1,164       1,099  
    Total revenue     27,454       26,306       54,320       51,323  
OPERATING EXPENSES                                
  Merchandise costs     23,897       23,043       47,282       44,867  
  Selling, general and administrative     2,671       2,531       5,367       5,032  
  Preopening expenses     9       8       24       32  
    Operating income     877       724       1,647       1,392  
OTHER INCOME (EXPENSE)                                
  Interest expense     (27 )     (26 )     (53 )     (53 )
  Interest income and other, net     20       30       55       48  
INCOME BEFORE INCOME TAXES     870       728       1,649       1,387  
  Provision for income taxes     263       255       537       483  
Net income including noncontrolling interests     607       473       1,112       904  
Net income attributable to noncontrolling interests     (9 )     (10 )     (18 )     (16 )
NET INCOME ATTRIBUTABLE TO COSTCO   $ 598     $ 463     $ 1,094     $ 888  
                                 
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:                                
  Basic   $ 1.36     $ 1.05     $ 2.49     $ 2.02  
  Diluted   $ 1.35     $ 1.05     $ 2.47     $ 2.01  
                                 
Shares used in calculation (000's)                                
  Basic     440,384       439,776       439,567       438,868  
  Diluted     442,896       442,829       442,522       442,627  
                                 
                                 
                                 
Cash dividends declared per common share   $ 5.355     $ 0.31     $ 5.710     $ 0.62  
                                 
 
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
Subject to Reclassifications
 
    February 15,
2015
  August 31,
 2014
ASSETS            
Cash and cash equivalents   $ 5,866   $ 5,738
Short-term investments     1,587     1,577
Receivables, net     1,287     1,148
Merchandise inventories     8,558     8,456
Deferred income taxes and other current assets     760     669
  Total current assets     18,058     17,588
Property and equipment, net     14,872     14,830
Other assets     670     606
TOTAL ASSETS   $ 33,600   $ 33,024
             
LIABILITIES AND EQUITY            
             
Accounts payable   $ 8,302   $ 8,491
Accrued salaries and benefits     2,391     2,231
Deferred membership fees     1,318     1,254
Other current liabilities     6,238     2,436
  Total current liabilities     18,249     14,412
Long-term debt, excluding current portion     3,830     5,093
Deferred income taxes and other liabilities     1,096     1,004
  Total liabilities     23,175     20,509
             
Total Costco stockholders' equity     10,206     12,303
Noncontrolling interests     219     212
  Total equity     10,425     12,515
TOTAL LIABILITIES AND EQUITY   $ 33,600   $ 33,024

Contact Information

  • CONTACTS:

    Costco Wholesale Corporation

    Richard Galanti
    425/313-8203

    Bob Nelson
    425/313-8255

    Jeff Elliott
    425/313-8264