12 Weeks 24 Weeks
--------- ---------
U.S. 5% 5%
International 12% 13%
Total 7% 7%
========= =========
Inflation in gasoline prices and strengthening foreign currencies had a
positive impact on comparable sales. Excluding these effects, comparable
sales were as follows:
12 Weeks 24 Weeks
--------- ---------
U.S. 3% 3%
International 8% 9%
Total 4% 5%
========= =========
Net income for the quarter was $348 million, or $.79 per diluted share,
compared to $299 million, or $.67 per diluted share, last year. Net income
for the first half was $660 million, or $1.49 per diluted share, compared
to $565 million, or $1.27 per diluted share, last year. The quarter last
year included a $22 million pre-tax charge ($0.03 per diluted share)
related to a change in employee benefits. The consolidation of the Mexico
joint venture had no impact on net income or earnings per share
attributable to Costco.
The Company today also reported net sales of $6.38 billion for the four
weeks ended February 27, 2011, an increase of fourteen percent from $5.61
billion in the same four-week period of the prior fiscal year. For the
six-month retail reporting period of September through February, the
twenty-six weeks ended February 27, 2011, which includes the first two
weeks of the Company's fiscal third quarter, the Company reported net sales
of $42.46 billion, an increase of twelve percent from $38.06 billion during
the comparable period of the prior fiscal year. Mexico sales accounted for
approximately three percentage points of the increase for both the
four-week and twenty-six week periods.
Comparable sales for the 4-week retail-reporting month of February and the
26-week retail-reporting period of September through February, including
Mexico operations for both this and last year, were as follows:
4 Weeks 26 Weeks
--------- ---------
U.S. 6% 5%
International 14% 14%
Total 8% 7%
========= =========
Inflation in gasoline prices and strengthening foreign currencies had a
positive impact on comparable sales. Excluding these effects, comparable
sales were as follows:
4 Weeks 26 Weeks
--------- ---------
U.S. 4% 4%
International 7% 9%
Total 5% 5%
========= =========
Costco currently operates 581 warehouses, including 424 in the United
States and Puerto Rico, 80 in Canada, 22 in the United Kingdom, seven in
Korea, six in Taiwan, nine in Japan, one in Australia and 32 in Mexico.
The Company also operates Costco Online, an electronic commerce web site,
at www.costco.com and at www.costco.ca in Canada. The Company plans to open
an additional fifteen to sixteen new warehouses (including the relocation
of a warehouse to a larger and better-located facility and the reopening of
San Marcos, CA -- closed for an onsite relocation) prior to the end of its
2011 fiscal year on August 28, 2011.
A conference call to discuss these second quarter operating results and
February sales is scheduled for 8:00 a.m. (PT) today, March 2, 2011, 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, conditions affecting the acquisition,
development, ownership or use of real estate, actions of vendors, rising
costs associated with employees (including health care costs), 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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
12 Weeks Ended 24 Weeks Ended
------------------ ------------------
February February February February
13, 2011 14, 2010 13, 2011 14, 2010
-------- -------- -------- --------
REVENUE
Net sales $ 20,449 $ 18,356 $ 39,272 $ 35,278
Membership fees 426 386 842 763
-------- -------- -------- --------
Total revenue 20,875 18,742 40,114 36,041
OPERATING EXPENSES
Merchandise costs 18,235 16,396 34,992 31,477
Selling, general and administrative 2,038 1,873 3,979 3,650
Preopening expenses 4 3 16 14
Provision for impaired assets and
closing costs, net 2 - 6 2
-------- -------- -------- --------
Operating income 596 470 1,121 898
OTHER INCOME (EXPENSE)
Interest expense (27) (26) (53) (50)
Interest income and other, net 4 30 9 48
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 573 474 1,077 896
Provision for income taxes 204 169 376 321
-------- -------- -------- --------
Net income including noncontrolling
interests 369 305 701 575
Net income attributable to
noncontrolling interests (21) (6) (41) (10)
-------- -------- -------- --------
NET INCOME ATTRIBUTABLE TO COSTCO $ 348 $ 299 $ 660 $ 565
======== ======== ======== ========
NET INCOME PER COMMON SHARE
ATTRIBUTABLE TO COSTCO:
Basic $ 0.80 $ 0.68 $ 1.52 $ 1.29
======== ======== ======== ========
Diluted $ 0.79 $ 0.67 $ 1.49 $ 1.27
======== ======== ======== ========
Shares used in calculation (000's)
Basic 436,682 439,786 435,385 438,475
Diluted 443,186 446,918 442,283 445,870
Dividends per share $ 0.205 $ 0.18 $ 0.41 $ 0.36
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
Subject to Reclassifications
February 13, August 29,
2011 2010
------------- -------------
ASSETS
Cash and cash equivalents $ 3,355 $ 3,214
Short-term investments 2,024 1,535
Receivables, net 1,116 884
Merchandise inventories 6,127 5,638
Deferred income taxes and other current assets 516 437
------------- -------------
Total current assets 13,138 11,708
Property and equipment, net 12,102 11,314
Other assets 476 793
------------- -------------
TOTAL ASSETS $ 25,716 $ 23,815
============= =============
LIABILITIES AND EQUITY
Accounts payable $ 5,970 $ 5,947
Short-term borrowings 1 26
Other current liabilities 4,775 4,090
------------- -------------
Total current liabilities 10,746 10,063
Long-term debt, excluding current portion 2,144 2,141
Deferred income taxes and other liabilities 702 681
------------- -------------
Total liabilities 13,592 12,885
------------- -------------
Total Costco stockholders' equity 11,583 10,829
Noncontrolling interests 541 101
------------- -------------
Total equity 12,124 10,930
------------- -------------
TOTAL LIABILITIES AND EQUITY $ 25,716 $ 23,815
============= =============
Contact Information: CONTACTS: Costco Wholesale Corporation Richard Galanti, 425/313-8203 Bob Nelson, 425/313-8255 Jeff Elliott, 425/313-8264