ISSAQUAH, WA--(Marketwire - May 25, 2011) - Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) announced today its operating results for the third quarter (twelve weeks) and first thirty-six weeks of fiscal 2011, both ended May 8, 2011.
Net sales for the quarter increased 16 percent, to $20.19 billion, from $17.39 billion during the third quarter of fiscal 2010. Net sales for the first thirty-six weeks increased 13 percent, to $59.46 billion, from $52.66 billion last year. This year's results include sales from the Company's 50% owned Mexico joint venture, as the Company began consolidating its Mexico operations beginning with its 2011 fiscal year. Mexico sales accounted for approximately three percentage points of the increase for the quarter and the year-to-date sales.
Comparable sales for the third quarter and first thirty-six weeks of fiscal 2011, including Mexico operations for this year and last year, were as follows:
12 Weeks 36 Weeks
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U.S. 10% 6%
International 18% 15%
Total 12% 9%
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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 36 Weeks
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U.S. 6% 4%
International 11% 10%
Total 7% 6%
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Net income for the quarter was $324 million, or $.73 per diluted share, compared to $306 million, or $.68 per diluted share, last year. Net income for the first thirty-six weeks was $984 million, or $2.22 per diluted share, compared to $871 million, or $1.95 per diluted share, last year. The consolidation of the Mexico joint venture had no impact on net income or earnings per share attributable to Costco. The quarter this year included a $49 million pre-tax LIFO charge ($.07 per diluted share). There was no LIFO charge in any quarter of fiscal 2010. The prior year's third-quarter results were positively affected by a $14 million pretax benefit ($.02 per diluted share) related to a partial reversal of a Canadian tax liability.
Costco currently operates 581 warehouses, including 425 in the United States and Puerto Rico, 80 in Canada, 32 in Mexico, 22 in the United Kingdom, seven in Korea, six in Taiwan, eight in Japan, and one in Australia. 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 up to eleven additional warehouses prior to the end of its 2011 fiscal year on August 28, 2011.
A conference call to discuss these third quarter operating results is scheduled for 8:00 a.m. (PT) today, May 25, 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), 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.
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
12 Weeks Ended 36 Weeks Ended
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May 8, May 9, May 8, May 9,
2011 2010 2011 2010
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REVENUE
Net sales $ 20,188 $ 17,385 $ 59,460 $ 52,663
Membership fees 435 395 1,277 1,158
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Total revenue 20,623 17,780 60,737 53,821
OPERATING EXPENSES
Merchandise costs 18,067 15,494 53,059 46,971
Selling, general and
administrative 1,991 1,789 5,970 5,439
Preopening expenses 8 3 24 17
Provision for impaired assets
and closing costs, net 1 3 7 5
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Operating income 556 491 1,677 1,389
OTHER INCOME (EXPENSE)
Interest expense (27) (27) (80) (77)
Interest income and
other, net 5 10 14 58
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INCOME BEFORE INCOME TAXES 534 474 1,611 1,370
Provision for income taxes 193 163 569 484
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Net income including
noncontrolling interests 341 311 1,042 886
Net income attributable to
noncontrolling interests (17) (5) (58) (15)
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NET INCOME ATTRIBUTABLE TO
COSTCO $ 324 $ 306 $ 984 $ 871
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NET INCOME PER COMMON SHARE
ATTRIBUTABLE TO COSTCO:
Basic $ 0.74 $ 0.69 $ 2.26 $ 1.98
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Diluted $ 0.73 $ 0.68 $ 2.22 $ 1.95
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Shares used in calculation
(000's)
Basic 436,977 440,973 435,913 439,306
Diluted 443,570 448,391 442,727 446,709
Dividends per share $ 0.24 $ 0.205 $ 0.65 $ 0.565
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
Subject to Reclassifications
May 8, August 29,
2011 2010
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ASSETS
Cash and cash equivalents $ 4,082 $ 3,214
Short-term investments 2,133 1,535
Receivables, net 948 884
Merchandise inventories 6,396 5,638
Deferred income taxes and other current assets 510 437
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Total current assets 14,069 11,708
Property and equipment, net 12,300 11,314
Other assets 605 793
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TOTAL ASSETS $ 26,974 $ 23,815
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LIABILITIES AND EQUITY
Accounts payable $ 6,800 $ 5,947
Short-term borrowings 1 26
Other current liabilities 5,693 4,090
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Total current liabilities 12,494 10,063
Long-term debt, excluding current portion 1,247 2,141
Deferred income taxes and other liabilities 692 681
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Total liabilities 14,433 12,885
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Total Costco stockholders' equity 11,963 10,829
Noncontrolling interests 578 101
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Total equity 12,541 10,930
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TOTAL LIABILITIES AND EQUITY $ 26,974 $ 23,815
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Contact Information:
CONTACTS:
Costco Wholesale Corporation
Richard Galanti
425/313-8203
Bob Nelson
425/313-8255
Jeff Elliott
425/313-8264