SOURCE: Costco

May 25, 2016 21:00 ET

Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal Year 2016

ISSAQUAH, WA--(Marketwired - May 25, 2016) - Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) today announced its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2016, ended May 8, 2016.

Net sales for the quarter increased two percent, to $26.15 billion from $25.52 billion last year. Net sales for the first thirty-six weeks increased two percent, to $80.34 billion from $78.67 billion last year.

Comparable sales for the twelve-week and thirty-six-week periods were as follows:

         
    12 Weeks   36 Weeks
             
U.S.   0 %   2 %
Canada   1 %   -5 %
Other International   -2 %   -4 %
             
Total Company   0 %   0 %
             

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

         
    12 Weeks   36 Weeks
             
U.S.   3 %   4 %
Canada   8 %   9 %
Other International   3 %   5 %
             
Total Company   3 %   5 %
             

Net income for the quarter was $545 million, or $1.24 per diluted share, compared to $516 million, or $1.17 per diluted share, last year. Net income for the thirty-six weeks was $1.57 billion, or $3.56 per diluted share, compared to $1.61 billion, or $3.64 per diluted share, last year. Net income for the thirty-six-week period last year was positively impacted by $43 million ($0.10 per diluted share) in net nonrecurring income tax benefits.

Costco currently operates 705 warehouses, including 493 in the United States and Puerto Rico, 90 in Canada, 36 in Mexico, 27 in the United Kingdom, 25 in Japan, 12 in Korea, 12 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 third quarter operating results is scheduled for 8:00 a.m. (PT) on May 26, 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     36 Weeks Ended  
    May 8, 2016     May 10, 2015     May 8, 2016     May 10, 2015  
REVENUE                                
  Net sales   $ 26,151     $ 25,517     $ 80,345     $ 78,673  
  Membership fees     618       584       1,814       1,748  
    Total revenue     26,769       26,101       82,159       80,421  
OPERATING EXPENSES                                
  Merchandise costs     23,162       22,687       71,252       69,969  
  Selling, general and administrative     2,731       2,579       8,372       7,946  
  Preopening expenses     18       14       54       38  
    Operating income     858       821       2,481       2,468  
OTHER INCOME (EXPENSE)                                
  Interest expense     (30 )     (31 )     (94 )     (84 )
  Interest income and other, net     7       9       51       64  
INCOME BEFORE INCOME TAXES     835       799       2,438       2,448  
  Provision for income taxes     286       280       847       817  
  Net income including noncontrolling interests     549       519       1,591       1,631  
  Net income attributable to noncontrolling interests     (4 )     (3 )     (20 )     (21 )
NET INCOME ATTRIBUTABLE TO COSTCO   $ 545     $ 516     $ 1,571     $ 1,610  
                                 
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:                                
  Basic   $ 1.24     $ 1.17     $ 3.58     $ 3.66  
  Diluted   $ 1.24     $ 1.17     $ 3.56     $ 3.64  
                                 
  Shares used in calculation: (000's)                                
    Basic     438,815       440,070       438,930       439,733  
    Diluted     441,066       443,132       441,321       442,721  
                                 
                                 
                                 
Cash dividends declared per common share   $ 0.45     $ 0.40     $ 1.25     $ 6.11  
                                 
                                 
                                 
COSTCO WHOLESALE CORPORATION  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(amounts in millions, except par value and share data)  
(unaudited)  
   
Subject to Reclassifications  
    May 8,
 2016
    August 30,
 2015
 
ASSETS            
CURRENT ASSETS                
  Cash and cash equivalents   $ 4,884     $ 4,801  
  Short-term investments     1,137       1,618  
  Receivables, net     1,300       1,224  
  Merchandise inventories     8,927       8,908  
  Other current assets     294       228  
    Total current assets     16,542       16,779  
PROPERTY AND EQUIPMENT                
  Land     5,266       4,961  
  Buildings and improvements     13,645       12,618  
  Equipment and fixtures     5,834       5,274  
  Construction in progress     707       811  
        25,452       23,664  
  Less accumulated depreciation and amortization     (8,961 )     (8,263 )
    Net property and equipment     16,491       15,401  
OTHER ASSETS     840       837  
    TOTAL ASSETS   $ 33,873     $ 33,017  
LIABILITIES AND EQUITY                
CURRENT LIABILITIES                
  Accounts payable   $ 8,828     $ 9,011  
  Current portion of long-term debt     1,193       1,283  
  Accrued salaries and benefits     2,398       2,468  
  Accrued member rewards     861       813  
  Deferred membership fees     1,416       1,269  
  Other current liabilities     2,303       1,695  
    Total current liabilities     16,999       16,539  
LONG-TERM DEBT, excluding current portion     3,921       4,852  
OTHER LIABILITIES     1,205       783  
    Total liabilities     22,125       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; 438,368,000 and 437,952,000 shares issued and outstanding     2       2  
  Additional paid-in capital     5,404       5,218  
  Accumulated other comprehensive loss     (1,126 )     (1,121 )
  Retained earnings     7,225       6,518  
    Total Costco stockholders' equity     11,505       10,617  
  Noncontrolling interests     243       226  
    Total equity     11,748       10,843  
    TOTAL LIABILITIES AND EQUITY   $ 33,873     $ 33,017  
                     

Contact Information

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