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Costco Wholesale Corp New (COST) SEC Filing 8-K Material Event for the period ending Thursday, October 3, 2019

Costco Wholesale Corp New

CIK: 909832 Ticker: COST

Exhibit 99.1

 

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COSTCO WHOLESALE CORPORATION REPORTS FOURTH QUARTER AND FISCAL

YEAR 2019 OPERATING RESULTS

ISSAQUAH, Wash., October 3, 2019 - Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the 16-week fourth quarter and the 52-week fiscal year, ended September 1, 2019.

Net sales for the quarter were $46.45 billion, an increase of 7.0 percent from $43.41 billion during the similar period last year. Net sales for the fiscal year were $149.35 billion, an increase of 7.9 percent from $138.43 billion during the similar period last year.

Comparable sales for the fourth quarter and the fiscal year were as follows:

 

     16 Weeks     16 Weeks     52 Weeks     52 Weeks  
           Adjusted*           Adjusted*  

U.S.

     6.2     5.2     7.8     6.4

Canada

     2.6     4.7     1.6     5.3

Other International

     1.9     5.0     2.0     5.6

Total Company

     5.1     5.1     6.1     6.1
  

 

 

   

 

 

   

 

 

   

 

 

 

E-commerce

     19.8     21.9     23.1     23.3
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*

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 fourth quarter was $1,097 million, or $2.47 per diluted share, compared to $1,043 million, or $2.36 per diluted share, last year. This year’s fourth quarter was negatively impacted by a $123 million pre-tax reserve to SG&A ($96 million after-tax), or 22 cents per diluted share, related to a product tax assessment.

Net income for the fiscal year was $3.66 billion, or $8.26 per diluted share, compared to $3.13 billion, or $7.09 per diluted share, in the prior year. As previously disclosed and mentioned above, this year’s net income was impacted by a net benefit of $30 million or $0.07 per diluted share from primarily non-recurring items. Last year was positively impacted by a first quarter tax benefit of $41 million or $0.09 per diluted share.

Costco currently operates 783 warehouses, including 544 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 11 in Australia, two in Spain, one in France, one in Iceland, and one in China. Costco also operates e-commerce web 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, October 3, 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


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such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “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 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)

 

     16 Weeks Ended     52 Weeks Ended  
     September 1,
2019
    September 2,
2018
    September 1,
2019
    September 2,
2018
 

REVENUE

        

Net sales

   $ 46,448     $ 43,414     $ 149,351     $ 138,434  

Membership fees

     1,050       997       3,352       3,142  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     47,498       44,411       152,703       141,576  

OPERATING EXPENSES

        

Merchandise costs

     41,310       38,671       132,886       123,152  

Selling, general and administrative

     4,684       4,263       14,994       13,876  

Preopening expenses

     41       31       86       68  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     1,463       1,446       4,737       4,480  

OTHER INCOME (EXPENSE)

        

Interest expense

     (45     (48     (150     (159

Interest income and other, net

     74       51       178       121  
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME BEFORE INCOME TAXES

     1,492       1,449       4,765       4,442  

Provision for income taxes

     382       396       1,061       1,263  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income including noncontrolling interests

     1,110       1,053       3,704       3,179  

Net income attributable to noncontrolling interests

     (13     (10     (45     (45
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME ATTRIBUTABLE TO COSTCO

   $ 1,097     $ 1,043     $ 3,659     $ 3,134  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:

        

Basic

   $ 2.49     $ 2.38     $ 8.32     $ 7.15  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 2.47     $ 2.36     $ 8.26     $ 7.09  
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in calculation (000’s):

        

Basic

     439,727       438,379       439,755       438,515  

Diluted

     443,400       442,427       442,923       441,834  


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COSTCO WHOLESALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(unaudited)

Subject to Reclassifications

 

     September 1, 2019     September 2, 2018  
ASSETS     

CURRENT ASSETS

    

Cash and cash equivalents

   $ 8,384     $ 6,055  

Short-term investments

     1,060       1,204  

Receivables, net

     1,535       1,669  

Merchandise inventories

     11,395       11,040  

Other current assets

     1,111       321  
  

 

 

   

 

 

 

Total current assets

     23,485       20,289  
  

 

 

   

 

 

 

PROPERTY AND EQUIPMENT

    

Land

     6,417       6,193  

Buildings and improvements

     17,136       16,107  

Equipment and fixtures

     7,801       7,274  

Construction in progress

     1,272       1,140  
  

 

 

   

 

 

 
     32,626       30,714  

Less accumulated depreciation and amortization

     (11,736     (11,033
  

 

 

   

 

 

 

Net property and equipment

     20,890       19,681  
  

 

 

   

 

 

 

OTHER ASSETS

     1,025       860  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 45,400     $ 40,830  
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

CURRENT LIABILITIES

    

Accounts payable

   $ 11,679     $ 11,237  

Accrued salaries and benefits

     3,176       2,994  

Accrued member rewards

     1,180       1,057  

Deferred membership fees

     1,711       1,624  

Current portion of long-term debt

     1,699       90  

Other current liabilities

     3,792       2,924  
  

 

 

   

 

 

 

Total current liabilities

     23,237       19,926  

LONG-TERM DEBT, excluding current portion

     5,124       6,487  

OTHER LIABILITIES

     1,455       1,314  
  

 

 

   

 

 

 

Total liabilities

     29,816       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; 439,625,000 and 438,189,000 shares issued and outstanding

     4       4  

Additional paid-in capital

     6,417       6,107  

Accumulated other comprehensive loss

     (1,436     (1,199

Retained earnings

     10,258       7,887  
  

 

 

   

 

 

 

Total Costco stockholders’ equity

     15,243       12,799  

Noncontrolling interests

     341       304  
  

 

 

   

 

 

 

Total equity

     15,584       13,103  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 45,400     $ 40,830  
  

 

 

   

 

 

 

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Ticker: COST
CIK: 909832
Form Type: 8-K Corporate News
Accession Number: 0001193125-19-261698
Submitted to the SEC: Thu Oct 03 2019 4:41:14 PM EST
Accepted by the SEC: Thu Oct 03 2019
Period: Thursday, October 3, 2019
Industry: Retail Variety Stores
Events:
  1. Earnings Release
  2. Financial Exhibit

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