SOURCE: Costco

May 29, 2014 03:01 ET

Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal 2014

ISSAQUAH, WA--(Marketwired - May 29, 2014) - Costco Wholesale Corporation ("Costco" or the "Company") (NASDAQ: COST) announced today its operating results for the third quarter (twelve weeks) and the first thirty-six-weeks of fiscal 2014, ended May 11, 2014. Net sales for the quarter increased seven percent, to $25.23 billion, from $23.55 billion last year. Net sales for the first thirty-six weeks increased six percent, to $75.46 billion, from $71.10 billion last year.

Comparable sales were as follows:

         
         
    12 Weeks   36 Weeks
U.S.   5%   4%
International   3%   1%
         
Total   4%   3%
         
         

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

         
         
    12 Weeks   36 Weeks
U.S.   6%   5%
International   8%   7%
         
Total   6%   5%
         
         

Net income for the quarter was $473 million, or $1.07 per diluted share, compared to $459 million, or $1.04 per diluted share, last year. Net income for the first thirty-six weeks was $1.36 billion, or $3.07 per diluted share, compared to $1.42 billion, or $3.23 per diluted share, last year. Net income for the thirty-six week period last year was positively impacted by a second quarter $62 million ($.14 per diluted share) tax benefit in connection with the portion of the special cash dividend paid in December 2012 to the Company 401(k) plan participants.

Costco currently operates 655 warehouses, including 464 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 19 in Japan, 10 in Taiwan, 10 in Korea, six in Australia, and one in Spain. The Company plans to open up to an additional eight new warehouses prior to the end of its fiscal year on August 31, 2014. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom and Mexico.

A conference call to discuss these third quarter operating results is scheduled for 8:00 a.m. (PT) today, May 29, 2014, 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, amounts expected to be spent on expansion plans, 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  
    May 11,
2014
    May 12,
2013
    May 11,
2014
    May 12,
2013
 
REVENUE                                
  Net sales   $ 25,233     $ 23,552     $ 75,457     $ 71,099  
  Membership fees     561       531       1,660       1,570  
    Total revenue     25,794       24,083       77,117       72,669  
OPERATING EXPENSES                                
  Merchandise costs     22,554       21,038       67,421       63,530  
  Selling, general and administrative     2,487       2,313       7,519       7,006  
  Preopening expenses     16       10       48       34  
    Operating income     737       722       2,129       2,099  
OTHER INCOME (EXPENSE)                                
  Interest expense     (25 )     (25 )     (78 )     (63 )
  Interest income and other, net     12       15       60       61  
INCOME BEFORE INCOME TAXES     724       712       2,111       2,097  
  Provision for income taxes     245       248       728       658  
Net income including noncontrolling interests     479       464       1,383       1,439  
Net income attributable to noncontrolling interests     (6 )     (5 )     (22 )     (17 )
NET INCOME ATTRIBUTABLE TO COSTCO   $ 473     $ 459     $ 1,361     $ 1,422  
                                 
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:                                
  Basic   $ 1.08     $ 1.05     $ 3.10     $ 3.27  
  Diluted   $ 1.07     $ 1.04     $ 3.07     $ 3.23  
                                 
Shares used in calculation (000's)                                
  Basic     439,446       436,488       439,058       435,293  
  Diluted     442,720       440,780       442,651       439,738  
                                 
                                 
                                 
Cash dividends declared per common share   $ 0.355     $ 0.31     $ 0.975     $ 7.86  
                                 
 
 
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
Subject to Reclassifications
 
 
    May 11,
2014
  September 1,
2013
ASSETS            
Cash and cash equivalents   $ 5,736   $ 4,644
Short-term investments     1,539     1,480
Receivables, net     1,115     1,201
Merchandise inventories     8,483     7,894
Deferred income taxes and other current assets     660     621
  Total current assets     17,533     15,840
Property and equipment, net     14,583     13,881
Other assets     585     562
TOTAL ASSETS   $ 32,701   $ 30,283
             
LIABILITIES AND EQUITY            
             
Accounts payable   $ 8,361   $ 7,872
Accrued salaries and benefits     2,056     2,037
Other current liabilities     2,973     2,181
Deferred membership fees     1,297     1,167
  Total current liabilities     14,687     13,257
Long-term debt, excluding current portion     4,985     4,998
Deferred income taxes and other liabilities     1,008     1,016
  Total liabilities     20,680     19,271
             
Total Costco stockholders' equity     11,819     10,833
Noncontrolling interests     202     179
  Total equity     12,021     11,012
TOTAL LIABILITIES AND EQUITY   $ 32,701   $ 30,283
             
             

Contact Information

  • CONTACTS:
    Costco Wholesale Corporation
    Richard Galanti
    425/313-8203

    Bob Nelson
    425/313-8255

    Jeff Elliott
    425/313-8264