Exhibit 99.1

 

Press Release    LOGO

 

COSTCO WHOLESALE CORPORATION REPORTS SECOND QUARTER AND YEAR-TO-DATE

OPERATING RESULTS FOR FISCAL 2019 AND FEBRUARY SALES RESULTS

ISSAQUAH, Wash., March 7, 2019 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the second quarter (twelve weeks) and the first 24 weeks of fiscal 2019, ended February 17, 2019.

Net sales for the quarter increased 7.3 percent, to $34.63 billion from $32.28 billion last year. Net sales for the first 24 weeks increased 8.7 percent, to $68.94 billion from $63.40 billion last year.

Comparable sales for the second quarter and year-to-date

periods ended February 17, 2019, were as follows:

 

     12 Weeks     12 Weeks     24 Weeks     24 Weeks  
           Adjusted*           Adjusted*  

U.S.

     7.4     7.2     9.2     7.6

Canada

     -0.3     6.0     1.1     5.7

Other International

     0.7     4.8     2.3     5.3

Total Company

     5.4     6.7     7.1     7.0
  

 

 

   

 

 

   

 

 

   

 

 

 

E-commerce

     20.2     25.5     25.9     25.8
  

 

 

   

 

 

   

 

 

   

 

 

 

 

  *

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

Reported net income for the quarter was $889 million, or $2.01 per diluted share, compared to $701 million, or $1.59 per diluted share, last year. Net income for the first 24 weeks was $1.66 billion, or $3.74 per diluted share, compared to $1.34 billion, or $3.04 per diluted share, last year.

For the four-week reporting month of February, ended March 3, 2019, the Company reported net sales of $10.72 billion, an increase of 5.0 percent from $10.21 billion last year. For the twenty-six week period ended March 3, 2019, net sales were $74.42 billion, an increase of 8.6 percent from $68.51 billion last year.

Comparable sales for the February and year-to-date periods ended March 3, 2019, were as follows:

 

     4 Weeks     4 Weeks     26 Weeks     26 Weeks  
           Adjusted*           Adjusted*  

U.S.

     6.0     5.7     9.0     7.4

Canada

     0.0     4.8     1.1     5.7

Other International

     -5.9     -1.2     2.3     5.5

Total Company

     3.5     4.6     6.9     6.9
  

 

 

   

 

 

   

 

 

   

 

 

 

E-commerce

     24.2     21.6     26.2     25.5
  

 

 

   

 

 

   

 

 

   

 

 

 

 

  *

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


Press Release    LOGO

 

 

February’s sales were negatively impacted approximately 1% by weather throughout the U.S. and Canada. In addition, Lunar New Year/Chinese New Year occurred eleven days earlier in February this year, negatively impacting February’s Other International sales by approximately 4.5% and Total Company sales by approximately 0.5%.

Costco currently operates 770 warehouses, including 535 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, and one each in Iceland and 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, March 7, 2019, 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 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

    

    Josh Dahmen, 425/313-8254


Press Release    LOGO

 

 

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except per share data)

(unaudited)

 

     12 Weeks Ended     24 Weeks Ended  
     February 17, 2019     February 18, 2018     February 17, 2019     February 18, 2018  

REVENUE

        

Net sales

   $ 34,628     $ 32,279     $ 68,939     $ 63,396  

Membership fees

     768       716       1,526       1,408  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     35,396       32,995       70,465       64,804  

OPERATING EXPENSES

        

Merchandise costs

     30,720       28,733       61,343       56,350  

Selling, general and administrative

     3,464       3,234       6,939       6,458  

Preopening expenses

     9       12       31       29  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     1,203       1,016       2,152       1,967  

OTHER INCOME (EXPENSE)

        

Interest expense

     (34     (37     (70     (74

Interest income and other, net

     46       7       68       29  
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME BEFORE INCOME TAXES

     1,215       986       2,150       1,922  

Provision for income taxes

     314       273       472       558  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income including noncontrolling interests

     901       713       1,678       1,364  

Net income attributable to noncontrolling interests

     (12     (12     (22     (23
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO COSTCO

   $ 889     $ 701     $ 1,656     $ 1,341  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:

        

Basic

   $ 2.02     $ 1.60     $ 3.77     $ 3.06  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 2.01     $ 1.59     $ 3.74     $ 3.04  
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in calculation (000’s):

        

Basic

     440,284       439,022       439,721       438,494  

Diluted

     442,337       441,568       442,535       441,201  


Press Release    LOGO

 

 

COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(unaudited)

Subject to Reclassifications

 

     February 17, 2019     September 2, 2018  
ASSETS     

CURRENT ASSETS

    

Cash and cash equivalents

   $ 6,080     $ 6,055  

Short-term investments

     1,042       1,204  

Receivables, net

     1,995       1,669  

Merchandise inventories

     11,356       11,040  

Other current assets

     1,175       321  
  

 

 

   

 

 

 

Total current assets

     21,648       20,289  
  

 

 

   

 

 

 

PROPERTY AND EQUIPMENT

    

Land

     6,300       6,193  

Buildings and improvements

     16,533       16,107  

Equipment and fixtures

     7,704       7,274  

Construction in progress

     1,165       1,140  
  

 

 

   

 

 

 
     31,702       30,714  

Less accumulated depreciation and amortization

     (11,557     (11,033
  

 

 

   

 

 

 

Net property and equipment

     20,145       19,681  
  

 

 

   

 

 

 

OTHER ASSETS

     1,006       860  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 42,799     $ 40,830  
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

CURRENT LIABILITIES

    

Accounts payable

   $ 10,711     $ 11,237  

Accrued salaries and benefits

     3,173       2,994  

Accrued member rewards

     1,130       1,057  

Deferred membership fees

     1,735       1,624  

Current portion of long-term debt

     1,698       90  

Other current liabilities

     4,003       2,924  
  

 

 

   

 

 

 

Total current liabilities

     22,450       19,926  

LONG-TERM DEBT, excluding current portion

     4,794       6,487  

OTHER LIABILITIES

     1,372       1,314  
  

 

 

   

 

 

 

Total liabilities

     28,616       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; 439,989,000 and 438,189,000 shares issued and outstanding

     4       4  

Additional paid-in capital

     6,218       6,107  

Accumulated other comprehensive loss

     (1,280     (1,199

Retained earnings

     8,916       7,887  
  

 

 

   

 

 

 

Total Costco stockholders’ equity

     13,858       12,799  

Noncontrolling interests

     325       304  
  

 

 

   

 

 

 

Total equity

     14,183       13,103  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 42,799     $ 40,830  
  

 

 

   

 

 

 

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