Exhibit 99.1

 

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COSTCO WHOLESALE CORPORATION REPORTS FIRST QUARTER

FISCAL YEAR 2019 OPERATING RESULTS

ISSAQUAH, Wash., December 13, 2018 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the first quarter (twelve weeks) of fiscal 2019, ended November 25, 2018.

Net sales for the first quarter were $34.31 billion, an increase of 10.3 percent from $31.12 billion during the first quarter last year.

Comparable sales for the first quarter fiscal 2019 were as follows:

 

     12 Weeks     12 Weeks
Adjusted*
 

U.S.

     11.0     8.3

Canada

     2.4     5.5

Other International

     4.0     5.8

Total Company

     8.8     7.5
  

 

 

   

 

 

 

E-commerce

     32.3     26.2
  

 

 

   

 

 

 

 

  *

Excluding the impacts from changes in gasoline prices, foreign exchange, and a previously disclosed accounting change concerning revenue recognition (ASC 606).

Net income for the quarter was $767 million, or $1.73 per diluted share, compared to $640 million, or $1.45 per diluted share, last year. This year’s first quarter benefited from a $59 million ($0.13 per diluted share) tax benefit related to stock-based compensation and a $27 million ($0.06 per diluted share) tax benefit related to implementation of the 2017 Tax Act. In addition, the quarter includes a charge of $43 million ($31 million after-tax, $0.07 per diluted share) for an adjustment to our estimate of breakage on rewards earned prior to Fiscal Year 2019 for the Citi/Visa co-branded credit card program. Last year’s first quarter benefited from a $41 million ($0.09 per diluted share) tax benefit related to stock-based compensation.

Costco currently operates 768 warehouses, including 533 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the United Kingdom, 26 in Japan, 15 in Korea, 13 in Taiwan, 10 in Australia, two in Spain, one in Iceland, and one in France. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, and Taiwan.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, December 13, 2018, 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. In some cases forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “likely,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and


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the negatives of those terms. 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 (generally including health care costs), energy and certain commodities, geopolitical conditions (including tariffs), the ability to remediate material weaknesses in internal control, 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 the Company does not undertake to update these statements, except as required by law.

 

CONTACTS:

Costco Wholesale Corporation

    

Richard Galanti, 425/313-8203

    

Bob Nelson, 425/313-8255

    

David Sherwood, 425/313-8239


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COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except per share data)

(unaudited)

 

     12 Weeks Ended  
     November 25, 2018     November 26, 2017  

REVENUE

    

Net sales

   $ 34,311     $ 31,117  

Membership fees

     758       692  
  

 

 

   

 

 

 

Total revenue

     35,069       31,809  

OPERATING EXPENSES

    

Merchandise costs

     30,623       27,617  

Selling, general and administrative

     3,475       3,224  

Preopening expenses

     22       17  
  

 

 

   

 

 

 

Operating income

     949       951  

OTHER INCOME (EXPENSE)

    

Interest expense

     (36     (37

Interest income and other, net

     22       22  
  

 

 

   

 

 

 

INCOME BEFORE INCOME TAXES

     935       936  

Provision for income taxes

     158       285  
  

 

 

   

 

 

 

Net income including noncontrolling interests

     777       651  

Net income attributable to noncontrolling interests

     (10     (11
  

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO COSTCO

   $ 767     $ 640  
  

 

 

   

 

 

 

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:

    

Basic

   $ 1.75     $ 1.46  
  

 

 

   

 

 

 

Diluted

   $ 1.73     $ 1.45  
  

 

 

   

 

 

 

Shares used in calculation (000’s):

    

Basic

     439,157       437,965  

Diluted

     442,749       440,851  

CASH DIVIDENDS DECLARED PER COMMON SHARE

   $ 0.57     $ 0.50  

 


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COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in millions, except par value and share data)

(unaudited)

Subject to Reclassifications

 

     November 25, 2018     September 2, 2018  
ASSETS     

CURRENT ASSETS

    

Cash and cash equivalents

   $ 6,778     $ 6,055  

Short-term investments

     1,175       1,204  

Receivables, net

     1,795       1,669  

Merchandise inventories

     12,205       11,040  

Other current assets

     1,001       321  
  

 

 

   

 

 

 

Total current assets

     22,954       20,289  
  

 

 

   

 

 

 

PROPERTY AND EQUIPMENT

    

Land

     6,211       6,193  

Buildings and improvements

     16,355       16,107  

Equipment and fixtures

     7,448       7,274  

Construction in progress

     1,130       1,140  
  

 

 

   

 

 

 
     31,144       30,714  

Less accumulated depreciation and amortization

     (11,265     (11,033
  

 

 

   

 

 

 

Net property and equipment

     19,879       19,681  
  

 

 

   

 

 

 

OTHER ASSETS

     981       860  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 43,814     $ 40,830  
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

CURRENT LIABILITIES

    

Accounts payable

   $ 13,133     $ 11,237  

Accrued salaries and benefits

     2,982       2,994  

Accrued member rewards

     1,077       1,057  

Deferred membership fees

     1,695       1,624  

Other current liabilities

     3,586       3,014  
  

 

 

   

 

 

 

Total current liabilities

     22,473       19,926  

LONG-TERM DEBT, excluding current portion

     6,480       6,487  

OTHER LIABILITIES

     1,382       1,314  
  

 

 

   

 

 

 

Total liabilities

     30,335       27,727  
  

 

 

   

 

 

 

COMMITMENTS AND CONTINGENCIES

    

EQUITY

    

Preferred stock $0.01 par value; 100,000,000 shares authorized; no shares issued and outstanding

     —         —    

Common stock $0.01 par value; 900,000,000 shares authorized; 440,546,000 and 438,189,000 shares issued and outstanding

     4       4  

Additional paid-in capital

     6,107       6,107  

Accumulated other comprehensive loss

     (1,331     (1,199

Retained earnings

     8,387       7,887  
  

 

 

   

 

 

 

Total Costco stockholders’ equity

     13,167       12,799  

Noncontrolling interests

     312       304  
  

 

 

   

 

 

 

Total equity

     13,479       13,103  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 43,814     $ 40,830  
  

 

 

   

 

 

 

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