SOURCE: Costco

March 02, 2016 21:00 ET

Costco Wholesale Corporation Reports Second Quarter and Year-to-Date Operating Results for Fiscal Year 2016 and February Sales Results

ISSAQUAH, WA--(Marketwired - Mar 2, 2016) - Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) today announced its operating results for the second quarter (twelve weeks) and first half (24 weeks) of fiscal 2016, ended February 14, 2016.

Net sales for the quarter increased three percent, to $27.57 billion from $26.87 billion last year. Net sales for the first half increased two percent, to $54.19 billion from $53.16 billion last year.

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

         
    12 Weeks   24 Weeks
U.S.   3%   3%
Canada   -7%   -8%
Other International   -3%   -4%
         
Total Company   1%   0%
         

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

         
    12 Weeks   24 Weeks
U.S.   4%   5%
Canada   10%   10%
Other International   6%   6%
         
Total Company   5%   6%
         

Net income for the quarter was $546 million, or $1.24 per diluted share, compared to $598 million, or $1.35 per diluted share, last year. Net income for the first half was $1,026 million, or $2.32 per diluted share, compared to $1,094 million, or $2.47 per diluted share, last year.

Net income for the quarter last year was positively impacted by a $57 million ($0.13 per diluted share) tax benefit in connection with a special cash dividend received by the Company 401(k) plan participants, and 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 February 28, 2016, the Company reported net sales of $8.28 billion, an increase of one percent from $8.18 billion during the similar four-week period last year. For the twenty-six week period ended February 28, 2016, net sales were $58.25 billion, an increase of two percent from $57.19 billion during the similar period last year.

Comparable sales for the four-week and twenty-six-week periods ended February 28, 2016 were as follows:

         
    4 Weeks   26 Weeks
U.S.   2%   2%
Canada   -2%   -8%
Other International   -8%   -5%
         
Total Company   0%   0%
         

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.   4%   5%
Canada   10%   10%
Other International   0%   6%
         
Total Company   4%   5%
         

Costco currently operates 698 warehouses, including 488 in the United States and Puerto Rico, 90 in Canada, 36 in Mexico, 27 in the United Kingdom, 24 in Japan, 12 in Korea, 11 in Taiwan, eight in Australia and two in Spain. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.

A conference call to discuss these fiscal 2016 second quarter operating results and February sales results is scheduled for 8:00 a.m. (PT) on March 3, 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  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
(dollars in millions, except per share data)  
(unaudited)  
   
   
    12 Weeks Ended     24 Weeks Ended  
    February 14, 2016     February 15, 2015     February 14, 2016     February 15, 2015  
REVENUE                                
  Net sales   $ 27,567     $ 26,872     $ 54,194     $ 53,156  
  Membership fees     603       582       1,196       1,164  
    Total revenue     28,170       27,454       55,390       54,320  
OPERATING EXPENSES                                
  Merchandise costs     24,469       23,897       48,090       47,282  
  Selling, general and administrative     2,835       2,671       5,641       5,367  
  Preopening expenses     10       9       36       24  
    Operating income     856       877       1,623       1,647  
OTHER INCOME (EXPENSE)                                
  Interest expense     (31 )     (27 )     (64 )     (53 )
  Interest income and other, net     16       20       44       55  
INCOME BEFORE INCOME TAXES     841       870       1,603       1,649  
  Provision for income taxes     286       263       561       537  
  Net income including noncontrolling interests     555       607       1,042       1,112  
  Net income attributable to noncontrolling interests     (9 )     (9 )     (16 )     (18 )
NET INCOME ATTRIBUTABLE TO COSTCO   $ 546     $ 598     $ 1,026     $ 1,094  
                                 
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:                                
  Basic   $ 1.24     $ 1.36     $ 2.34     $ 2.49  
  Diluted   $ 1.24     $ 1.35     $ 2.32     $ 2.47  
                                 
  Shares used in calculation: (000's)                                
    Basic     439,648       440,384       438,990       439,567  
    Diluted     441,559       442,896       441,457       442,522  
                                 
                                 
                                 
Cash dividends declared per common share   $ 0.40     $ 5.355     $ 0.80     $ 5.710  
                                 
   
   
COSTCO WHOLESALE CORPORATION  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(amounts in millions, except par value and share data)  
(unaudited)  
   
Subject to Reclassifications  
   
    February 14,
2016
    August 30,
 2015
 
ASSETS                
CURRENT ASSETS                
  Cash and cash equivalents   $ 3,633     $ 4,801  
  Short-term investments     1,222       1,618  
  Receivables, net     1,453       1,224  
  Merchandise inventories     8,908       8,908  
  Other current assets     313       228  
    Total current assets     15,529       16,779  
PROPERTY AND EQUIPMENT                
  Land     5,140       4,961  
  Buildings and improvements     13,212       12,618  
  Equipment and fixtures     5,623       5,274  
  Construction in progress     727       811  
        24,702       23,664  
  Less accumulated depreciation and amortization     (8,637 )     (8,263 )
    Net property and equipment     16,065       15,401  
OTHER ASSETS     794       837  
    TOTAL ASSETS   $ 32,388     $ 33,017  
LIABILITIES AND EQUITY                
CURRENT LIABILITIES                
  Accounts payable   $ 8,222     $ 9,011  
  Current portion of long-term debt     89       1,283  
  Accrued salaries and benefits     2,619       2,468  
  Accrued member rewards     846       813  
  Deferred membership fees     1,377       1,269  
  Other current liabilities     2,280       1,695  
    Total current liabilities     15,433       16,539  
LONG-TERM DEBT, excluding current portion     4,886       4,852  
OTHER LIABILITIES     835       783  
    Total liabilities     21,154       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; 439,256,000 and 437,952,000 shares issued and outstanding     2       2  
  Additional paid-in capital     5,341       5,218  
  Accumulated other comprehensive loss     (1,344 )     (1,121 )
  Retained earnings     7,001       6,518  
    Total Costco stockholders' equity     11,000       10,617  
  Noncontrolling interests     234       226  
    Total equity     11,234       10,843  
    TOTAL LIABILITIES AND EQUITY   $ 32,388     $ 33,017  
                     

Contact Information

  • CONTACTS:
    Costco Wholesale Corporation
    Richard Galanti
    425/313-8203
    Bob Nelson
    425/313-8255
    Jeff Elliott
    425/313-8264