Exhibit 99.1

 

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

OPERATING RESULTS FOR FISCAL 2019

ISSAQUAH, Wash., May 30, 2019 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the third quarter (twelve weeks) and the first thirty-six

weeks of fiscal 2019, ended May 12, 2019.

Net sales for the quarter increased 7.4 percent, to $33.96 billion, from $31.62 billion last year. Net sales for the first thirty-six weeks increased 8.3 percent, to $102.90 billion, from $95.02 billion last year.

Comparable sales for the third quarter and year-to-date periods ended May 12, 2019, were as follows:

 

     12 Weeks     12 Weeks     36 Weeks     36 Weeks  
           Adjusted*           Adjusted*  

U.S.

     7.0     5.5     8.5     6.9

Canada

     1.3     5.1     1.1     5.5

Other International

     1.7     6.9     2.1     5.8

Total Company

     5.5     5.6     6.6     6.5
  

 

 

   

 

 

   

 

 

   

 

 

 

E-commerce

     22.0     19.5     24.7     23.9
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*

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 $906 million, or $2.05 per diluted share, compared to $750 million, or $1.70 per diluted share, last year. Net income for the thirty-six weeks was $2.56 billion, or $5.79 per diluted share, compared to $2.09 billion, or $4.74 per diluted share, last year. This year’s third quarter benefitted from a non-recurring tax item of $73 million, or 16 cents per diluted share.

Costco currently operates 773 warehouses, including 536 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 11 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, May 30, 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


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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 that they are made, and the Company does not undertake to update them, 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


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COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(dollars in millions, except per share data)

(unaudited)

 

     12 Weeks Ended     36 Weeks Ended  
     May 12, 2019     May 13, 2018     May 12, 2019     May 13, 2018  

REVENUE

        

Net Sales

   $ 33,964     $ 31,624     $ 102,903     $ 95,020  

Membership fees

     776       737       2,302       2,145  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     34,740       32,361       105,205       97,165  

OPERATING EXPENSES

        

Merchandise costs

     30,233       28,131       91,576       84,481  

Selling, general and administrative

     3,371       3,155       10,310       9,613  

Preopening expenses

     14       8       45       37  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     1,122       1,067       3,274       3,034  

OTHER INCOME (EXPENSE)

        

Interest expense

     (35     (37     (105     (111

Interest income and other, net

     36       41       104       70  
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME BEFORE INCOME TAXES

     1,123       1,071       3,273       2,993  

Provision for income taxes

     207       309       679       867  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income including noncontrolling interests

     916       762       2,594       2,126  

Net income attributable to noncontrolling interests

     (10     (12     (32     (35
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO COSTCO

   $ 906     $ 750     $ 2,562     $ 2,091  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:

        

Basic

   $ 2.06     $ 1.71     $ 5.83     $ 4.77  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 2.05     $ 1.70     $ 5.79     $ 4.74  
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in calculation (000’s):

        

Basic

     439,859       438,740       439,767       438,576  

Diluted

     442,642       441,715       442,565       441,383  


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COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(unaudited)

Subject to Reclassifications

 

     May 12, 2019     September 2, 2018  
ASSETS     

CURRENT ASSETS

    

Cash and cash equivalents

   $ 7,013     $ 6,055  

Short-term investments

     1,154       1,204  

Receivables, net

     1,704       1,669  

Merchandise inventories

     11,304       11,040  

Other current assets

     1,110       321  
  

 

 

   

 

 

 

Total current assets

     22,285       20,289  
  

 

 

   

 

 

 

PROPERTY AND EQUIPMENT

    

Land

     6,310       6,193  

Buildings and improvements

     16,644       16,107  

Equipment and fixtures

     7,858       7,274  

Construction in progress

     1,412       1,140  
  

 

 

   

 

 

 
     32,224       30,714  

Less accumulated depreciation and amortization

     (11,749     (11,033
  

 

 

   

 

 

 

Net property and equipment

     20,475       19,681  
  

 

 

   

 

 

 

OTHER ASSETS

     992       860  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 43,752     $ 40,830  
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

CURRENT LIABILITIES

    

Accounts payable

   $ 11,331     $ 11,237  

Accrued salaries and benefits

     2,888       2,994  

Accrued member rewards

     1,160       1,057  

Deferred membership fees

     1,761       1,624  

Current portion of long-term debt

     1,699       90  

Other current liabilities

     3,993       2,924  
  

 

 

   

 

 

 

Total current liabilities

     22,832       19,926  

LONG-TERM DEBT, excluding current portion

     4,799       6,487  

OTHER LIABILITIES

     1,301       1,314  
  

 

 

   

 

 

 

Total liabilities

     28,932       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; 439,811,000 and 438,189,000 shares issued and outstanding

     4       4  

Additional paid-in capital

     6,307       6,107  

Accumulated other comprehensive loss

     (1,321     (1,199

Retained earnings

     9,496       7,887  
  

 

 

   

 

 

 

Total Costco stockholders’ equity

     14,486       12,799  

Noncontrolling interests

     334       304  
  

 

 

   

 

 

 

Total equity

     14,820       13,103  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 43,752     $ 40,830  
  

 

 

   

 

 

 

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