SOURCE: Costco

May 27, 2015 21:00 ET

Costco Wholesale Corporation Reports Third Quarter and Year-to-Date Operating Results for Fiscal 2015

ISSAQUAH, WA--(Marketwired - May 27, 2015) - 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 2015, ended May 10, 2015.

Net sales for the quarter increased one percent, to $25.52 billion, from $25.23 billion last year. Net sales for the first thirty-six weeks increased four percent, to $78.67 billion, from $75.46 billion last year.

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

         
    12 Weeks   36 Weeks
U.S.   1%   4%
International   -6%   -2%
         
Total   -1%   2%
         

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

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

Net income for the quarter was $516 million, or $1.17 per diluted share, compared to $473 million, or $1.07 per diluted share, last year. Net income for the thirty-six weeks was $1.61 billion, or $3.64 per diluted share, compared to $1.36 billion, or $3.07 per diluted share, last year. Net income for the thirty-six-week period was positively impacted by a $57 million ($0.13 per diluted share) tax benefit in connection with a second quarter special cash dividend to the extent received by the Company 401(k) plan participants; and was negatively impacted by a $14 million ($0.03 per diluted share) second quarter tax charge relating to an ongoing income tax matter.

Costco currently operates 673 warehouses, including 474 in the United States and Puerto Rico, 89 in Canada, 35 in Mexico, 26 in the United Kingdom, 20 in Japan, 11 in Korea, 10 in Taiwan, seven in Australia and one in Spain. The Company plans to open up to an additional 15 new warehouses (including one relocation to a larger and better-located facility) prior to the end of its fiscal year on August 30, 2015. 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) tomorrow, May 28, 2015, 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 10,
 2015
    May 11,
 2014
    May 10,
2015
    May 11,
 2014
 
REVENUE                                
  Net sales   $ 25,517     $ 25,233     $ 78,673     $ 75,457  
  Membership fees     584       561       1,748       1,660  
    Total revenue     26,101       25,794       80,421       77,117  
OPERATING EXPENSES                                
  Merchandise costs     22,687       22,554       69,969       67,421  
  Selling, general and administrative     2,579       2,487       7,946       7,519  
  Preopening expenses     14       16       38       48  
    Operating income     821       737       2,468       2,129  
OTHER INCOME (EXPENSE)                                
  Interest expense     (31 )     (25 )     (84 )     (78 )
  Interest income and other, net     9       12       64       60  
INCOME BEFORE INCOME TAXES     799       724       2,448       2,111  
  Provision for income taxes     280       245       817       728  
Net income including noncontrolling interests     519       479       1,631       1,383  
Net income attributable to noncontrolling interests     (3 )     (6 )     (21 )     (22 )
NET INCOME ATTRIBUTABLE TO COSTCO   $ 516     $ 473     $ 1,610     $ 1,361  
                                 
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:                                
  Basic   $ 1.17     $ 1.08     $ 3.66     $ 3.10  
  Diluted   $ 1.17     $ 1.07     $ 3.64     $ 3.07  
                                 
Shares used in calculation (000's)                                
  Basic     440,070       439,446       439,733       439,058  
  Diluted     443,132       442,720       442,721       442,651  
                                 
                                 
                                 
Cash dividends declared per common share   $ 0.400     $ 0.355     $ 6.110     $ 0.975  
                                 
 
COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
Subject to Reclassifications
 
    May 10,
2015
  August 31,
 2014
ASSETS            
Cash and cash equivalents   $ 5,063   $ 5,738
Short-term investments     1,742     1,577
Receivables, net     1,195     1,148
Merchandise inventories     8,869     8,456
Deferred income taxes and other current assets     765     669
  Total current assets     17,634     17,588
Property and equipment, net     15,083     14,830
Other assets     774     606
TOTAL ASSETS   $ 33,491   $ 33,024
             
LIABILITIES AND EQUITY            
             
Accounts payable   $ 8,895   $ 8,491
Accrued salaries and benefits     2,160     2,231
Deferred membership fees     1,336     1,254
Other current liabilities     4,345     2,436
  Total current liabilities     16,736     14,412
Long-term debt, excluding current portion     4,826     5,093
Deferred income taxes and other liabilities     1,115     1,004
  Total liabilities     22,677     20,509
             
Total Costco stockholders' equity     10,587     12,303
Noncontrolling interests     227     212
  Total equity     10,814     12,515
TOTAL LIABILITIES AND EQUITY   $ 33,491   $ 33,024
             

Contact Information

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